WASHINGTON — The number of home foreclosures in process and delinquent mortgages rose during the second quarter, while home retention actions also increased, U.S. bank regulators said on Wednesday.
Foreclosures jumped 16 percent to 2.9 percent of serviced mortgages, while home retention actions such as loan modifications rose 21.7 percent, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a report.
“The mortgage data reported for the second quarter of 2009 continued to reflect negative trends influenced by weakness in economic conditions, including high unemployment and declining home prices in weak housing markets,” the report said.
Read More: -Reuters
MOBILE, Alabama (Reuters) – Business activity in the U.S. Midwest failed to return to growth in September as expected, and instead got slammed by a decline in production and new orders, a report showed on Wednesday.The Institute for Supply Management-Chicago business barometer fell to 46.1 in September from 50.0 in August. Economists had forecast the index at 52.0. A reading above 50 indicates expansion in the regional economy.
Read More: -Reuters
The destructive effects of the financial crisis may be waning, but your retirement account won’t soon forget. Savers lost 40% or more in the downturn — a collective $2.1 trillion disappeared from 401k and IRA assets in 2008 alone — and while the recent stock market recovery may feel good, it’s done little to stem a mounting crisis in the retirement system in the United States.
It’s not just investments that are the problem: Social Security needs financial resuscitation, and the bursting of the housing bubble that helped spark the financial crisis vaporized the home equity many people were counting on to fund their golden years. Corporations are curtailing traditional pensions, and older Americans are being forced to work longer to make up the difference.
Where does this leave our retirement plans? Ask a middle-class American when he plans to retire, and more often than not you’ll get a wry chuckle and “I’ll be working until I die.” The attempt at humor masks what may be close to reality for some people.
Read More: -By MarketWatch
WASHINGTON — A plan that regulators proposed Tuesday to have banks prepay $45 billion in insurance premiums won’t provide a long-term fix for the shrinking fund that insures bank deposits.
But the Federal Deposit Insurance Corp.’s proposal would spare ailing banks the immediate cost of an alternative idea: paying an emergency fee for the second time this year. And most banks would likely be able to prepay their premiums without having to reduce lending to businesses and consumers.
Regulators said they expect the cost of bank failures to grow to about $100 billion over the next four years — up from an estimate of $70 billion earlier this year. Faced with that sobering news, they voted to require banks to prepay $45 billion in premiums to replenish an insurance fund that will start running dry on Wednesday.
Read More: – Associated Press
WASHINGTON — The recession has hit middle-income and poor families hardest, widening the economic gap between the richest and poorest Americans as rippling job layoffs ravage household budgets.
The wealthiest 10% of Americans — those making more than $138,000 a year — earned 11.4 times the $12,000 or so made by those living near or below the poverty line in 2008, according to newly released census figures. That ratio is an increase from 11.2 in 2007 and the previous high o11.22 in 2003.
Household income declined across all groups, but more sharply for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decade’s worth of gains to hit the lowest level since 1997. the median is the midpoint — half of households made more, half less.
Read More: -By Hope Yen, Associated Press Writer
NEW YORK (Reuters) – U.S. house prices rose for a third month in July, but consumer confidence fell unexpectedly in September as the worst job market in 26 years fueled worries about personal finances, private reports showed on Tuesday.
The data indicates the economic rebound is still in its early days following the worst recession in decades, and it could be a long time before consumers contribute to growth.
Despite improvements elsewhere in the economy and a roaring stock market rally since March, the weakness of the consumer sector bodes ill for the year-end, traditionally a period of heavy shopping and spending.
Read More: -Reuters
WASHINGTON (AP) – Federal regulators expect bank failures to cost the deposit insurance fund about $100 billion in the next four years and the fund to be running at a deficit Wednesday.
That is higher than an earlier estimate of $70 billion in failure costs through 2013.
The Federal Deposit Insurance Corp. made the projections Tuesday as its board voted to propose requiring banks to prepay an estimated $45 billion in regular insurance premiums for 2010-2012. The proposal could take effect after a 30-day public comment period.
Read More: -Associated Press
NEW YORK — U.S. corporate debt default rates are expected to hit “unprecedented” levels in 2009, even though the economy may be past the halfway mark of the U.S. recession, according to a forecast unveiled on Monday at the Reuters Restructuring Summit.
“There is a lot of pain left — we are only just half way through the 600 or so defaults in this cycle,” said Phil Kleweno, a partner at Bain’s corporate renewal group.
The forecast for the 2009 corporate default rate has risen to 12 percent to 14 percent, from a May forecast of 11 percent to 13 percent, according to Bain’s corporate default outlook. That suggests a total of about 180 to 210 companies could default on their debt this year.
Read More: -Reuters
NEW YORK (CNNMoney.com) — As the H1N1 swine flu virus starts its second major sweep through the U.S., business owners are bracing for the impact of a worse-than-usual flu season on their workforces. That’s reviving debate on a contentious issue: What kind of sick leave should companies offer employees — and should it be mandated by law?
“On the one hand, you have all of our top officials saying, ‘Do the responsible thing. If you’re sick, stay home,’” says Debra Ness, president of the National Partnership for Women and Families, a Washington, D.C.-based advocacy group that is pushing for paid sick leave laws. “You have advice from the Centers for Disease Control on exactly how many days you should stay home, and how many days we need to keep kids at home. And at the same time, we have a country where almost half the workforce doesn’t have a single paid sick day.”
Read More: -By Neil deMause, CNNMoney.com contributing writer
WASHINGTON — Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that’s happened since the 1980s.
The deficits — $10 billion in 2010 and $9 billion in 2011 — won’t affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn’t expect the increase to be so large.
Read More: -By Associated Press
