By JACOB ADELMAN, Associated Press Jacob Adelman, Associated Press – Sun Nov 7, 3:08 pm ET

LOS ANGELES – Grocery store owners William and Esperanza Casco were making enough money to stay current on their mortgage, but when JPMorgan Chase & Co. offered a plan that reduced their payments, they figured they could use the extra cash and signed up.

The Cascos say they never missed a subsequent payment, so they were horrified when the bank decided the smaller payments weren’t enough and foreclosed on their modest Long Beach home.

Their story is echoed across the country by people who claim — some in lawsuits — that banks didn’t live up to their end of the deal when they agreed to trial mortgage modifications.

The suits add to a feeling among many struggling homeowners that they’re getting little help from the part of the government’s $700 billion Wall Street rescue that aimed to help them directly.

Indeed, Treasury statistics show that only about one-third of the nearly 1.4 million homeowners accepted into the government’s payment reduction program over the past year have had their reductions made permanent.

“It is extremely unfair that someone like me and my wife who have owned our home for 17 years and never missed a payment could end up in foreclosure,” Casco, 47, said in Spanish through an interpreter.

Chase spokesman Gary Kishner was unable to comment on whether Cascos had been current on their payments but insisted the bank had treated the couple fairly.

“We worked with the borrower to give him as many opportunities as possible to qualify for a modification,” he said. “However, they were not able to do so and therefore we were forced to foreclose on the property.”

Several federal lawsuits filed in Boston accuse major lenders of breach of contract under the government’s Home Affordable Modification Program, in which banks agreed to participate as part of the bank bailout.

The lawsuits say the banks agreed under HAMP to grant permanent mortgage modifications to borrowers who make all payments during trial modifications.

Attorney Shennan Alexandra Kavanagh said several of the plaintiffs lost their homes after their payments reverted to their original sums that they were unable to pay. She said she believes tens of thousands of borrowers in Massachusetts alone could be covered by the suits if they get class-action status.

One of the lawsuits, against Bank of America Corp., was consolidated earlier this month with similar complaints in five other states, Kavanagh said.

Bank of America spokeswoman Shirley Norton said in an e-mail that the lender will continue aggressively defending itself against the cases.

More lawsuits have been filed against other lenders elsewhere.

In San Francisco, the Housing and Economic Rights Advocates legal services group sued Chase, accusing the New York bank of profiting from collecting payments during long trial modifications that ultimately end in foreclosure.

“They’re participating in the crisis they had helped to foment by refusing to honor loan modifications they had already agreed to,” said attorney James C. Sturdevant, whose firm is assisting in the lawsuit.

Chase’s Kishner said he could not comment on the pending litigation.

Joseph R. Mason, a professor at Louisiana State University’s business school who has written widely on the subprime lending debacle, said he suspects the loan modification disputes are a legacy of the federal government’s rush to stem the flow of foreclosures before it had adequate plans in place.

“These policymakers said, just go out and do this and don’t let us worry about the details,” he said. “These details are now what are coming to the fore in these modification cases.”

Laurie Maggiano, policy director at the Treasury Department’s Homeownership Preservation Office, said banks were encouraged to offer trial modifications based on interviews with borrowers about their incomes and expenses while they sorted out the paperwork to qualify for permanently reduced payments.

The banks were under no obligation to make trial modifications permanent until this June, when new regulations stopped loan servicers from offering the trials based on stated income, Maggiano said.

Now, incomes and other details are being fully vetted before trial periods, and borrowers are preapproved for a permanent modification as long as they make three trial period payments, she said.

She also said banks are only obliged to grant modifications if the investors who hold the mortgages also benefit from the modification, as mandated by the October 2008 legislation approving the bailout.

Those explanations provide little comfort to the Cascos.

“I think that banks are playing games with us,” William Casco said.

Casco said his monthly mortgage payments to Washington Mutual Inc. went up to $2,765 when he refinanced his home in 2006 to pay for a new a meat counter at his store in the industrial Los Angeles suburb of South Gate.

Chase was in the process of acquiring Washington Mutual in January 2009 when Casco said it sent a note telling him he qualified for a lower forbearance rate. The El Salvador native sent the tax returns and business documents the bank was requesting.

His payment was reduced to $1,250, where it remained for several months until Chase told him to apply for a trial loan modification.

Again, Casco said, he sent Chase the documentation they requested. His payment rose to $2,363 in June, then returned to the forbearance rate in October.

Casco said he continued paying what he was asked until August 2010, when Chase told his family that they were $50,000 behind on their payments and put them into foreclosure.

The home has since been sold and Casco is currently fighting eviction. That has him considering joining an existing lawsuit against the bank or seeking support to file a suit on his own.

“I’m determined to do whatever it takes in order to keep my house,” he said. “I feel that a great injustice has been done to my family.”

By MARCY GORDON, AP Business Writer Marcy Gordon, Ap Business Writer – Fri Nov 5, 5:43 pm ET

WASHINGTON – Government-controlled mortgage buyer Fannie Mae is asking for $2.5 billion in additional federal aid after posting a narrower loss in the third quarter.

Fannie Mae also said Friday it was likely that the market disarray and suspension of foreclosures due to big lenders’ problems with flawed documents will have a negative impact on the delinquency rates of its loans, its expenses and foreclosure timelines. However, the company said, “we cannot yet predict the extent of its impact.”

Fannie Mae said Friday it lost $3.46 billion, or 61 cents a share, in the July-September quarter. That takes into account $2.1 billion in dividend payments to the Treasury Department. It compares with a loss of $19.8 billion, or $3.47 a share, in the third quarter of 2009.

The government rescued Washington-based Fannie Mae and sibling company Freddie Mac about two years ago and it estimates that will cost taxpayers up to $259 billion. That’s nearly twice the $133.4 billion Fannie and Freddie are in line to receive from taxpayers so far and would make it the most expensive bailout of the financial crisis.

The $2.5 billion in additional aid that Fannie is asking for compares with a request for $1.5 billion in the second quarter.

Fannie and Freddie together have repaid $16.7 billion as dividends to the Treasury Department.

Fannie’s chief executive said Friday the latest results reflect ongoing efforts to contain losses from the high-risk mortgages it bought from 2005 to 2008 and to build up new, more profitable loan business with tighter lending standards.

McLean, Va.-based Freddie Mac reported Wednesday that it managed a narrower loss of $4.1 billion for the third quarter and asked for an additional $100 million in federal aid — far less than the $1.8 billion it sought in the second quarter.

But neither Fannie nor Freddie are out of the woods yet.

The two mortgage giants have been hit by massive losses on risky mortgages purchased from 2005 through 2008. The companies have tightened their lending standards after those loans started to go bad, and default rates on new loans are far lower.

The housing market, however, remains a huge challenge. High unemployment, tepid economic growth, tight credit and uncertainty about home prices have kept people from buying.

Add to that the uncertainty stemming from allegations that big lenders used flawed foreclosure documents to seize millions of homes, a controversy that could put added scrutiny on Fannie and Freddie and bring fresh losses for them.

Fannie and Freddie used some of the same law firms that are accused of processing foreclosure files with flawed documents. They are revoking thousands of foreclosure cases from one Florida law firm which is under investigation for falsifying documents used to complete foreclosures.

Several major banks have been accused of similar conduct. If the banks can’t resolve their foreclosure problems and are barred from seizing many homes, Fannie and Freddie could absorb huge losses on loans they own or guarantee. That’s because they would no longer be able to recover anything on loans that have gone bad.

Fannie and Freddie buy up home loans from lenders, bundle them together into securities with a guarantee against default and sell them to investors worldwide. They own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion.

Fannie Mae reported its earnings three days after midterm elections in which criticism of the government’s financial bailouts had figured prominently in many races. Fannie and Freddie have many critics, especially among Republican lawmakers whose party gained control of the House in Tuesday’s elections.

Over the next year, lawmakers plan to review the nation’s mortgage-lending system and consider a potential replacement for Fannie and Freddie. The financial overhaul signed by President Barack Obama in July didn’t address that issue, despite protests from Republicans that it was incomplete without such a plan.

An analysis issued Thursday by Standard & Poor’s found the total eventual cost to taxpayers of rescuing Fannie and Freddie and funding new entities to replace them could reach $685 billion.

By Soyoung Kim and Clare Baldwin Soyoung Kim And Clare Baldwin – Wed Nov 3, 7:57 pm ET

NEW YORK (Reuters) – General Motors on Wednesday finalized terms for a stock offering of about $13 billion to repay a controversial taxpayer-funded bailout and reduce the U.S. Treasury to a minority shareholder.

GM’s filing with the U.S. Securities and Exchange Commission is the final step before it begins marketing what is expected to be one of the largest-ever IPOs. The investors are expected to span the globe and include sovereign wealth funds.

The automaker plans to sell 365 million common shares, or 24 percent of its common stock, at $26 to $29 each, raising about $10 billion at the midpoint, according to updated initial public offering papers filed with the SEC.

In addition, GM said it planned to sell about $3 billion of preferred shares that would convert to common shares under mandatory provisions, a less risky form of equity that could attract dividend and growth-fund investors.

The IPO would value GM at just over $41 billion at the midpoint of the price range, making it all but certain that U.S. taxpayers would face a loss on the automaker’s still controversial bailout. GM needs a market value of roughly $70 billion if U.S. taxpayers are to break even.

At $41 billion, GM would also be priced at about a 16 percent discount to its smaller but more successful rival Ford Motor Co, which has a market capitalization of more than $48 billion.

“That would make sense,” said Bernie McGinn, chief investment officer at McGinn Investment Management in Alexandria, Virginia, who owns Ford stock. “Ford has done everything right, and GM is a year out of bankruptcy and it has a new CEO.”

McGinn said the discounted value for GM also reflected the urgency for the Obama administration to exit its investment in the U.S. automaker.

“I think this is a political thing. It’s being driven by Washington,” he said. “They just want to get out. And if you talk about eating $10 billion in losses, this is a city that can eat trillions of dollars.”

One source familiar with the offering said, “(The Treasury) decided they wanted a massive upside.” The source was not authorized to speak with the media and declined to be named.

“The tough actions that the Administration took to get the auto industry back on its feet and save over one million jobs played a crucial role in putting our economy on the path to recovery. Today’s development represents another important step forward in our oft-repeated policy of exiting these investments as soon as practicable and recovering funds on behalf of the American taxpayer,” the U.S. Treasury said in a statement.

GM, which will have 1.5 billion outstanding common shares following a planned 3-for-1 stock split in the IPO, would need to trade at roughly $50 per share in the market to reach the $70 billion break-even threshold.

The Treasury, which holds a 60.8 percent stake in GM as a result of its $50 billion bailout, will take a loss of up to $4.9 billion on its sale of shares in the IPO.

The Treasury plans to cut its stake to just over 43 percent, excluding the overallotment option.

Treasury officials led by former Lazard Freres and Co banker Ron Bloom have indicated that they are willing to take an initial loss on GM as part of the Obama administration’s stated goal of exiting from the government’s investment as “quickly as practicable.”

Underscoring the political sensitivities still surrounding GM’s bailout, Senator Chuck Grassley in a statement on Wednesday urged the Treasury to ensure “taxpayers get their money in full.”

TAXPAYERS’ ODDS

Some analysts said a rally in GM shares — and a stronger recovery in global auto sales — could still bring the U.S. taxpayer-funded investment closer to break-even.

“It’s only the starting point,” IHS Automotive analyst Aaron Bragman said of the initial valuation of GM and the paper loss for Treasury. “GM knew it was not going to get it all back at once.”

GM shares would have to gain over 80 percent after the IPO to allow the U.S. government to break even on its investment before accounting for banking fees. By comparison, shares in Ford have gained 52 percent this year.

GM executives say the company’s restructuring through its 2009 bankruptcy has allowed the company to break even at around 11 million in annual U.S. auto sales — a figure close to the near 30-year lows that the industry saw in 2009.

U.S. auto sales are expected to rise to about 11.5 million this year from 10.4 million last year, and are widely expected to recover to the pre-recession level of more than 15 million units within the next few years.

GM, the top U.S. automaker by sales, said earlier on Wednesday that it expected third-quarter earnings of $2.1 billion and that it would turn a “solid” profit for the full 2010 year.

BIGGEST U.S. IPO SINCE VISA

If everything goes as planned, the offering would be the largest U.S. IPO since Visa Inc’s $19.7 billion IPO in 2008.

GM’s underwriters could sell an additional 54.75 million common shares and 9 million preferred shares if the IPO attracts robust investor demand, raising another roughly $2 billion and potentially taking the total IPO amount to as much as $15.65 billion, the company said in the amended prospectus.

GM will use some charter flights for its executives on its visits to prospective investors over the next two weeks, GM said on Wednesday.

GM and its U.S.-based rivals Chrysler and Ford sparked public outrage two years ago when executives flew to Washington on chartered jets to ask the federal government for money.

Once a blue-chip stock, GM is expected to return to the New York Stock Exchange under the “GM” ticker symbol as well as a listing on the Toronto Stock Exchange. GM is expected to price its IPO on November 17 and begin trading on November 18, sources said.

The governments of Canada and Ontario plan to sell down their combined stake to 9.64 percent from 11.67 percent and the United Auto Workers VEBA trust is expected to reduce its stake to 15.33 percent from 19.93 percent.

GM plans to contribute $4 billion cash and $2 billion of common stock to its pensions after the IPO to address an area of investor concern.

Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citi are leading the underwriters on the offering. UBS, which was listed as an underwriter as recently as GM’s last S-1 filing on October 29 was not listed in Wednesday’s filing. It was not immediately clear why UBS is no longer part of the syndicate and UBS declined comment.

(Reporting by Soyoung Kim, Clare Baldwin and Jonathan Stempel in New York, David Bailey, Kevin Krolicki, Deepa Seetharaman, and Bernie Woodall in Detroit; editing by Gary Hill and Andre Grenon)

By Emily Kaiser Emily Kaiser – Sun Oct 31, 6:49 pm ET

WASHINGTON (Reuters) – While voters cast ballots on Tuesday in an election expected to shift Congress to the right, the Federal Reserve convenes what could be its most pivotal meeting since the height of the financial crisis.

The central bank was designed to be above political influence. But its policy decisions are not completely immune to the political environment.

A more conservative Congress would reduce the already slim chance that more fiscal support will come, putting the burden squarely on the Fed’s shoulders to shore up a limp economy.

Douglas Holtz-Eakin, an economist who advised John McCain during his unsuccessful 2008 presidential campaign, said normally the Fed keeps quiet around elections to avoid any semblance of political involvement.

This time, the central bank sent a clear signal that it intended to take action, and investors are convinced the move will come this week in the form of relaunching asset purchases. This week’s policy-setting meeting lasts two days, so the Fed’s announcement will come on Wednesday, just after the election.

“It looks to me a bit desperate,” Holtz-Eakin said, adding that he was not convinced another round of money printing would do much to stimulate the economy.

“I would have liked to see them hold on to their ammunition in case we really need it.”

President Barack Obama’s Democratic party is expected to lose its majority in the House of Representatives, while the Democrat-controlled Senate may move closer to a 50-50 split.

Republicans have made opposition to last year’s $814 billion stimulus package a central plank of their election campaign, tapping into voter dissatisfaction with the slow pace of recovery and weak job market.

The White House, recognizing there is probably not enough political backing, has said little about additional stimulus. However, two former Obama administration officials — ex-Budget Director Peter Orszag and former Economic Adviser Christina Romer — have pressed hard for more help.

“The necessary shifts in fiscal policy are extremely unlikely to happen,” Orszag wrote in the New York Times last week. “So we’re left relying on monetary policy … which may create more problems than it solves.”

Orszag warned that the Fed’s easy money makes government borrowing unusually cheap, leaving Congress less inclined to tackle medium-term deficit cuts that he thinks are essential to a sustainable recovery.

OH YEAH, THE JOBS REPORT

This week brings a veritable feast for central bank watchers. In addition to the Fed, the European Central Bank and Bank of England hold their meetings on Thursday, and the Bank of Japan brought forward its next policy review to Thursday and Friday, heightening speculation that it may ramp up its own asset-buying program after the Fed’s announcement.

No policy changes are expected from the ECB or the BoE, particularly after last week’s surprisingly strong reading on Britain’s third-quarter economic growth.

In a sign of just how action-packed the coming week is, Friday’s U.S. employment report — normally the undisputed data heavyweight — has received relatively little attention.

Economists polled by Reuters are expecting a lackluster gain of 60,000 jobs, about one-quarter of the number analysts see as necessary to start dragging down unemployment.

Obama said on Friday that Democrats and Republicans shared a responsibility to promote job growth after the elections and urged Congress to approve business tax breaks he has proposed as a way to boost hiring.

Once the Fed’s announcement is released, jobs will no doubt shift back into the investor spotlight.

Michael Hartnett, chief global equity strategist at Bank of America-Merrill Lynch, said payrolls are the “big game-changer” for markets, not only on Friday but through the next year.

“If (corporate) profits decline before job growth picks up, then look for bonds to outperform equities,” he said in a note to clients. “If payrolls pick up before profit growth slows, then look for equities to outperform bonds.”

(Editing by Dan Grebler)

Local businesses are expecting more opportunities to open up for export in the near future as several free trade agreements (FTA) between Vietnam and other countries are being negotiated.

In mid-October, the first session of a multi-national working party representing Vietnam, Russia, Belarus and Kazakhstan took place in Hanoi to prepare for the first researches on the impact of a free trade area between Vietnam and the Russia-Belarus-Kazakhstan customs alliance.

According to Dang Hoang Hai, Head of the European Market Department under the Ministry of Industry and Trade (MoIT), if a FTA is established, Vietnamese businesses will have more opportunity to trade in the Eastern European market as they do not face direct competition. In particular, agricultural products – a Vietnamese strongpoint – will get a better foothold in this market.

Also this month, the third round of negotiations on the trans-Pacific Partnership Agreement (TPP) was held in Brunei with eight countries taking part, including Singapore, Brunei, Australia, the US, New Zealand, Chile, Peru and Vietnam. The TPP is expected to stimulate growth for businesses that operate in the Asian-Pacific region, which is seen as one of the world’s most dynamic markets.

According to the President of the Vietnam Garments and Textiles Group (Vinatex) Le Quoc An, if Vietnam becomes a TPP member, garments manufacturers will have an enormous opportunity, especially in the US and South American markets. “Therefore, businesses are waiting expectantly for this agreement to be signed,” he said.

In addition, Vietnam is also actively preparing for FTA negotiations with Chile .

However, Vietnamese businesses are still weak in taking advantage of tariff preferences from FTA. They have failed to form alliances with regional businesses to make the most of tariff preferences and access to new technologies.

It is difficult for Vietnam to establish a new export market or find markets with large consumer demands, say experts, who emphasised the importance of taking advantage of tariff preferences in large markets such as Eastern Europe, the EU, the US, Japan, the Republic of Korea and India, who Vietnam will establish FTAs with.

They recommended that Vietnamese businesses should keep a close watch on FTA negotiations between Vietnam and the aforementioned partners to prepare to take advantage of these markets.

According to the MoIT, Vietnam, together with ASEAN, has to date signed and implemented FTAs with six major partners in East Asia, including the ASEAN-China Free Trade Agreement (ACFTA), the ASEAN-RoK Free Trade Agreement (AKFTA), the ASEAN-Japan Comprehensive Economic Partnership (AJCEP); the ASEAN-Indian Free Trade Agreement (AIFTA) and the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).

These agreements were valued as essential for Vietnam to increase its export turnover.

Source: http://www.vietnamnews.us/markets/vietnam-expects-more-promising-export-markets/