Wall Street slumped to a 12-year low on Monday as investors lost faith that the U.S. government will be able to stabilize the financial system

Image by Getty Images via Daylife

The S&P 500 and the Dow both posted their lowest closes since the spring of 1997 as reports the government may convert its stake in Citigroup into a big common stock holding fell short of what many see as necessary to fix big banks.

“It is generally a market ‘no’ vote to what we’re getting from Washington,” said Hank Smith, chief investment officer at Haverford Trust Co in Philadelphia, of the reaction to the Citigroup news.

Florida unemployment

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Florida unemployment compensation benefits are increasing by $25 a week due to federal stimulus funding.

The higher rate went into effect Sunday under an agreement that Gov. Charlie Crist signed with the U.S. Department of Labor.

The AP reported that benefits in the state are based on a worker’s prior earnings. In 2008, the Florida unemployment benefits ranged from $32 to $275 per week. Under the new agreement, Florida’s weekly unemployment benefits will increase by $25.

According to the Tampa Bay Business Journal, approximately $12.2 billion of the $787 billion in the American Recovery and Reinvestment Act of 2009 is set to be delivered to Florida over the next three years. Additionally, some of the funding in the stimulus is already included in Governor Crist’s proposed $66.5-billion state budget for the next fiscal year. The budget is expected to either create or retain 314,590 jobs in the state, the Tampa Bay Business Journal reported.

Bank of America:Get Cash

Most popular fixed-rate mortgages:

30-Year Fixed-Rate Mortgage

The most common mortgage type, a 30-Year Fixed gives you the security of knowing your interest rate will never change. Perfect if you plan to live in your home for many years.

15-Year Fixed-Rate Mortgage

You get the security of a stable interest rate for the life of the mortgage. Plus, you can pay off the mortgage in less time while paying less interest over the life of the loan. Monthly payments are typically higher than the 30-year fixed rate.

Or get a customized mortgage to meet any of your needs.

My Refinance Rates
My Results – based on a loan of $100,000.00
Top Match for Your Request
Mortgage Type Current Rate Points APR Monthly Payment
30-Year Fixed 5.125 1.000 5.286 $544.49
View closing cost examples
Mortgage Type Current Rate Points APR Monthly Payment
NET 5 4.625 1.000 4.593 $385.42
3/1 Adjustable Rate Mortgage (ARM) 4.375 1.000 4.490 $499.29
5/1 Adjustable-Rate Mortgage (ARM) 4.375 0.750 4.469 $499.29
30-Year Fixed 5.125 1.000 5.286 $544.49
40-Year Fixed 6.250 1.000 6.397 $567.74
15-Year Fixed 4.750 1.000 5.025 $777.83
View additional rate and point combinations for each mortgage type.
View closing cost examples

www.bankofamerica.com

Federal Foreclosure

Last week, President Barack Obama unveiled a $75 billion housing plan to bail out some of the country’s most endangered homeowners.

One provision of the plan is great news, some lawyers and consumer advocates say. It would allow bankruptcy judges to modify the terms of mortgages.

Under such “judicial modifications” of home mortgages, judges would have the power to reduce mortgage loan balances for the primary residences of consumers who file for bankruptcy. They could also extend the term of the loan and reduce the interest rate “when families run out of other options,” according to the Obama plan

full article:http://www.dallasnews.com/sharedcontent/dws/bus/personalfinance/stories/DN-moneytalk_23bus.ART.State.Edition1.4c171c6.html

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Islamic Bank of Britain-Home Purchase Plan

Image by Ginger Nut Designs via Flickr

Islamic Bank of Britain is pleased to announce the launch of the Home Purchase Plan. Islamic Bank of Britain’s Home Purchase Plan has been approved by the Bank’s Sharia’a Supervisory Committee.

How does it work?

The Home Purchase Plan is based on the accepted and widely used Islamic financing principles of Ijara (leasing) and Diminishing Musharaka (reducing partnership).

For example, the bank may contribute 80% and you 20% of the purchase price. Over a period of up to 30 years, you will make monthly purchase instalments through which the Bank will sell its share (80%) of the home to you. With each instalment paid, the Bank’s share in the property diminishes while your share correspondingly increases.

The key features are listed below, with calculators available from the menu on the left, as well as a secure online Agreement in Principle which allows you to proceed to an online application form.

Key features

• 80% maximum finance to value

• Minimum £70,000 finance

• Maximum £750,000 finance

• Rent Rates (see note 1 below)

o Standard – Base rate + 1.95%
o Fees assisted – Base rate + 2.35%

• Introductory administration fee of £299*

• Term is 7 years to 30 years

• Available for new purchases, refinancing and releasing additional capital

• Option to choose a fees assisted product where the valuation and legal fees are paid by IBB (see note 2 below)

• Additional lump sum payments can be made in February and August prior to each rent review

• Customers can sell the property at any time subject to purchasing the Bank’s share in full

• Customers can make full payment at any time without any penalties

• Income from up to four people can be taken into account when assessing an application (see note 3 below)

• An affordability criteria is used in which a customer’s income and expenditure is assessed

• Minimum age of applicants is 21 years and maximum age is 65 years

• Rent is reviewed every six months in March and September, with the new rent rate effective from April and October

• Payments can be made from your IBB account or by Direct Debit from any other UK account

• Six monthly statements at rent reviews

* Introductory offer may be withdrawn at any time

Notes:

1
• There is a minimum collar rate for all our products at 5.95%. This
means the minimum rent will be 5.95% regardless if the Bank of England base rate goes lower.
• The Bank reserves the right to change the margin on any of its products. Customers will be given at least 30 days advance notice of any changes in the pricing structure.

2 Fees assisted product:
• The Bank will pay the standard valuation fees. See Tariff List.
• The Bank will pay up to £500 towards the cost of your solicitor’s fees provided that you choose a solicitor from the Bank’s panel list and the Bank will also pay up to £500 towards the cost of its solicitor’s fees. If the cost of your solicitor and the Bank’s solicitor is more than £500 each, you will be required to pay the difference.
• If you decide to settle your Home Purchase Plan during the first 5 years you will be required to repay to the Bank the full cost of the solicitors and valuation fees incurred.

3 The four people must be owner occupiers of the property being financed.

Terms and conditions apply. Please be sure to read those that apply to the product you have chosen. Finance is subject to status and valuation. Applicants must be 21 years of age or over and be a UK resident.

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS DUE UNDER THE LEGAL AGREEMENTS

The Home Purchase Plan facility is only available for purchases in England and Wales.

More: www.islamic-bank.com

Obama declares love for Canada, banishes Bush era

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OTTAWA (Reuters) – Declaring “I love this country” and waving to ecstatic Canadian crowds, U.S. President Barack Obama helped reignite on Thursday a close binational friendship that had waned during the administration of his predecessor George W. Bush.

Obama revived a tradition whereby new U.S. presidents make their first foreign trip to Canada, which is one of America’s most important trading partners.

Homeowners will get £500m in mortgage assistance to counter rise in repossessions

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Ministers will promise up to £500 million today to help struggling homeowners to keep their homes, as official figures are expected to show that repossessions soared by 70 per cent to 45,000 last year.

The Government will disclose further details of a key scheme to try to stem the rising tide of repossessions as borrowers face an increasingly toxic combination of slumping house prices and rising unemployment.

Lenders still expect repossessions to mount up this year, however, with the Council of Mortgage Lenders forecasting that 75,000 people will lose their homes and that more than 500,000 homeowners will fall behind with their mortgage payments.

Ministers have been in intense negotiations with lenders over the Homeowners Mortgage Support scheme, which will allow borrowers with mortgages up to £400,000 to take a payment holiday if they have suffered an “income shock”, such as losing their job or having their hours cut.

http://www.timesonline.co.uk

Lloyds, RBS to swell U.K. government debt levels

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LONDON (MarketWatch) — The official measure of British government debt will rise by as much as 1.5 trillion pounds ($2.1 trillion) after the Office for National Statistics confirmed Thursday it would classify Lloyds Banking Group and Royal Bank of Scotland as public-sector entities.

That means net liabilities of 1 trillion to 1.5 trillion pounds, equal to 70% to 100% of gross domestic product, will be added to the measure of U.K. public sector net debt. The change is effective from Oct. 13, 2008, when the government moved to recapitalize the troubled institutions.

The banks join lenders Northern Rock and Bradford & Bingley, who also hold the same classification.

Economists said the change to the figures would likely exaggerate taxpayers’ exposure to bank liabilities. A deteriorating picture for public sector borrowing is a bigger worry, they said.

The ONS, meanwhile, said figures from the two banking groups will be incorporated into data on public sector finances “as soon as is practicable, but it should be noted that they are large, complex organizations, and this may take some time.”

Public debt stood at 703 billion pounds in January or 47.8% of gross domestic product.

The U.K. government has pumped 17 billion pounds into Lloyds Banking Group and holds a roughly 43% stake in the company. The government has also pumped around 20 billion pounds into RBS and will hold a roughly 70% stake once preference shares are converted.

Economists deemed it questionable whether the metrics usually used to gauge manageable levels of public debt remain relevant when banks are brought under public control.

That’s because net debt is calculated by subtracting liquid assets from total liabilities — and banks, by the nature of their business, carry relatively few liquid assets as a proportion of their balance sheet, said Simon Hayes, an economist at Barclays Capital, in a research note. The measurement, meanwhile, ignores illiquid assets, such as loans to corporations and households, that do have value and will generate cash flow over time.

Also, since no government is likely to let a major bank collapse, it’s rather arbitrary whether a bank’s liabilities are included in public finance statistics, he said.

“When push comes to shove, the public finances of all major economies are vulnerable to any further deterioration in banking sector prospects, whatever the official net debt figures might say,” Hayes said.

Meanwhile, January borrowing figures showed U.K. public sector finances were in worse shape than expected, with the public sector repaying just 3.3 billion pounds in public borrowing compared to forecasts for a repayment of around 7.5 billion pounds. That marked the smallest repayment in 14 years.

January typically sees a big repayment because it is a major month for income and corporate tax payments.

For the 2008-09 financial year to date, the budget deficit stood at 42.5 billion pounds at the end of January, up from 7 billion at the same point in the 2007-08 financial year. Public sector net borrowing totaled 67.2 billion pounds to date, up from 23.1 billion at this point in 2007-08.

The British pound was unfazed by the news, rising 1.3% versus the dollar to $1.4408 in recent action. Sterling has fallen sharply since the middle of 2008, however, in part due to mounting concerns over the government’s deteriorating fiscal picture, economists said.

The pound traded just below $1.90 in late September.

Economists said the deteriorating public finance picture underlines a growing worry for the U.K. economy.

“As the deficit rises, [Chancellor of the Exchequer Alistair Darling] may well need to find a way of further convincing the markets of the U.K. government’s credibility – with the possibility of further future spending cuts and/or tax rises,” wrote Charles Davis, an economist at the Center for Economic and Business Research, a London think tank.

William L. Watts is a reporter for MarketWatch in London.

SOURCE:http://www.marketwatch.com

Stanford probe widens as Venezuela seizes bank

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CARACAS/ST.JOHN’S (Reuters) – Fraud probes into Texas billionaire Allen Stanford’s far-flung financial empire extended through two continents on Thursday as Venezuela and Ecuador seized a bank and two companies hit by the widening scandal.

Five Latin American countries have now taken action against Stanford businesses, while Britain’s Serious Fraud Office (SFO) is monitoring a possible UK link after media reports that Stanford’s books were audited in Britain.

The whereabouts of the jet-setting 58-year-old tycoon, who has a Caribbean knighthood and luxury U.S. and Caribbean homes, is not known. The U.S. Securities and Exchange Commission has accused him and two colleagues of “massive fraud”.

U.S. federal agents raided Stanford Group offices in Miami, Houston and other U.S. cities earlier this week.

The fallout from the SEC charges against the flamboyant, moustachioed financier has rippled far beyond U.S. borders, prompting investigations from Houston to Antigua and Caracas.

The SEC accused Stanford in a civil complaint on Tuesday of fraudulently selling $8 billion (5.6 billion pounds) in certificates of deposit with impossibly high interest rates from his Antiguan affiliate, Stanford International Bank Ltd (SIB).

The scandal, emerging hard on the heels of the alleged $50 billion fraud by Wall Street veteran Bernard Madoff, has again spooked international investors and sharply increased public distrust of investment schemes.

In Caracas, the government of socialist President Hugo Chavez took control of Stanford Bank Venezuela, one of the country’s smallest commercial banks, to stem massive online withdrawals following the SEC fraud charges.

bank of America_Mortgage Refinance

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