Refi fever takes hold. The rush of homeowners to refinance mortgages at lower rates is sparking a boom in home lending, prompting banks to hire thousands of new employees. The Mortgage Bankers Association estimates lenders could originate up to $2.78T in new mortgages this year, 80% of that involving refinancing. Economists estimate U.S. homeowners could save $18B on mortgage repayments this year if they refinance.
Take the money, or else. We already knew that then-Treasury Secretary Henry Paulson twisted bank executives' arms to accept a combined $125B in TARP money, but documents obtained yesterday by watchdog Judicial Watch shed new light on the extent of the coercion. "If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance," CEOs read in a set of Talking Points handed out by Paulson. The documents "show our government exercising unrestrained power over the private sector," Judicial Watch president Tom Fitton said in a statement, and alleges the Obama administration continues to cover up present Secretary Geithner's role in "this infamous bankers meeting."
Banks sue MBIA over split. Bank of America (BAC), Citigroup (C), JPMorgan (JPM), HSBC (HBC), Barclays (BCS), and 13 other large financial institutions are suing bond insurer MBIA (MBI), over its decision to split its businesses earlier this year into "good" and "bad" banks. The group claims the split was fraudulent, and left the insurance arma virtual shell company, with no ability to pay the banks' claims.
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