Many Hurt, But Don’t Worry About The Banks

During the home buying boom, banks made as many home loans as possible to take advantage of great volume of buyers. The loans were sold to mortgage trusts, who repackaged them as securities, and sold them off to private investors. This gave the banks greater flexibility on who they could give loans to, because they could take the loans off of their balance sheets, and didn’t have to worry so much about the borrower being able to pay them back. So they could make more loans.

Short Cuts Were Taken

Although the mortgage trusts were legally obliged to obtain and hold the mortgage notes, a lot of them didn’t bother with that. Of course, when the foreclosures come to court, these notes were supposed to come with the case, but instead the courts have been relying on affidavits claiming that all the paper work is in order. And, it has come to light, that many of these affidavits were signed by low level employees who have no idea what condition the papers are in.

Now there are a number of claims that many of the people who have been foreclosed on are victims of fraud. They have been charged fees they didn’t owe, sued for default when they weren’t behind.

The Government Comes On Soft

Instead of demanding that this mess is straightened out before any more people are wrongfully foreclosed on, the Obama administration is asking these financial institutions, which were recipients of bail out money over the last couple of years, kindly be more careful, and be better behaved as they continue in their foreclosures.

Conservatives in Congress are even less demanding of the banks, implying that proper records of borrower obligations are not anything to be concerned about. People should just assume that if the bank says it owns your house, then they do. Even those, I suppose, who have had the houses that they bought with cash foreclosed on, or those who have been foreclosed on by two different banks at the same time

Credit unions are increasingly an alternative for banks and payday loans

After more than a hundred years of being outside the mainstream financial services sector, last April it looked as though credit unions might start edging their way in.

£38m million of government funding was allocated to the Credit Union Expansion Project, with a view to growing credit union membership in the UK from just over 900,000 in 2012 to two million by 2017.

As an alternative to banks and pay day lenders, credit unions, owned by local savers and borrowers have fans who want to see a more sustainable financial system. So, is membership increasing and how is the expansion project taking shape?

The latest figures posted on the Bank of England’s website show a membership increase of almost 17% in the year ending September 2013. The previous two years saw year-on-year increases of 8% and 9%, respectively.

However, actual membership is still hovering just above the one million mark. There is a long way to go and hurdles to tackle to grow this number. Credit unions have an image problem that needs to be addressed in order to bring more sustainable finance on to their balance sheets, according to Matt Bland, policy manager at the Association of British Credit Unions (ABCUL).

He says the perception of credit unions for many people is still of a service that is for “the poor”.

ABCUL is charged with running the expansion project for the government. “The big challenge that we’re grappling with here is that there’s been too much focus on supporting people who find it difficult to access mainstream services, so credit unions can find themselves disproportionately exposed to bad debt.

“They want to continue to do that costly but socially worthwhile work, but it needs to be balanced with a core membership that is in a more financially stable position,” says Bland.

There are around 500 credit unions in the UK, differing vastly in size, from those with just a few hundred members and run by volunteers, to those with more than 10,000 members, offering a wider range of services such as insurance and mortgages. Many receive grant funding from local authorities or charities, but it’s not enough to sustain them.

Helping a larger number of credit unions grow and offer more service is something on which ABCUL is working with members. Attracting more customers is difficult with few high street service points and limited services.

“The expansion project is looking at how we can collaborate and access economies of scale to provide services in a way that credit unions couldn’t individually,” says Bland.

ABCUL is now exploring, for example, whether groups of credit unions could get together to create secondary cooperatives offering specialist products such as mortgages for members.

Martin Groombridge, chief executive of London Capital Credit Union and one of the delegates of a recent US credit union field trip run by ABCUL, was inspired by the range of innovative products he saw.

In the US, credit unions serve more than 46% of the economically active population. They have a more diverse membership and range of products.

London Capital now hopes to branch out itself by offering less costly consumer finance as an alternative to high interest store cards and credit cards.

“This will help a lot of small retailers who would otherwise be put out of business by competition from larger chains, and keep money in the local community as well as reducing the cost of credit,” he explains.

The big win for ABCUL would be getting more employers to offer employees the option to automatically put a portion of their salary into a credit union savings account each month. This would get the numbers up quickly and bring in sustainable income, says Bland.

But despite a number of big employers including Stagecoach, British Airways, parts of NHS, various councils, Parliament, many police forces, and others running such a scheme, employers often believe it will be more difficult to organise than it is, according to Bland.

Credit unions are also working independently of the expansion project to develop their offering.

Tees Credit Union in Stockton has secured £150,000 from a charity, the Northern Rock Foundation, to fund its expansion. It plans to offer better online access, provide more service points within the community and increase public recognition by moving to high street premises. Its target is to quadruple membership, which is currently just over 2,000, by 2018.

“This is a bank for the whole community, not just a poor person’s bank,” says manager, Diane Patterson.

Groombridge agrees: “Many ordinary working people are paying too much for credit, and there’s never been a better time for the credit union movement in this country to take a significant market share from the banks.”

Reaching two million by 2017 looks like a big hill to climb, but ABCUL is optimistic that continued adjustments can at least keep generating a year-on-year rise in membership and make an increasing dent in the UK’s financial services sector.

Citizen’s Advice finds payday loans account for 62% of credit used by 17-24 year olds suffering severe debt problem Payday loans Young people with debt more likely to get payday loans online uk than go to bank Citizen’s Advice finds payday loans account for 62%

BusinessInsider: It’s Got A Bulging Bank Account ” And Even Bigger Potential

They were looking for $2m and ended up with $7m. And for a news website that has been operating on a shoestring for the last four years that, as it says itself, makes its “bank account look positively massive”. ranks well on Google on financial news and its content is pretty strong, but it is still exceptional to hear of a website that offers news for free leveraging this kind of money.

The site’s founder, chief executive and editor, Henry Blodget, told the business model will change over time. “The main site is (and will remain) free. We’ll also be launching premium subscriptions at some point,” he said.

His new investor, Institutional Venture Partners , put money in “exceptional technology” companies and has an interesting portfolio including Tivo, Zynga, ComScore, LivingSocial, NetFlix and ” most significant of all ” Twitter.

Blodget says: “The vision is simple: to use the full capabilities of the digital medium to tell our global reader community what they need to know now ” while putting the fun back in business.”

After four years the company now employs 60 staff and boasts 12 milllion unique visitors a month ” 400,000 a day. If it can convert half of those into paying subscribers it will be doing well.

Just by way of comparison, the FT has a daily circulation of 356,196 and 229,000 paying digital subscribers ” but an online daily readership of 2.1 million worldwide.

So any advice for would-be journalistic startups? “One of the things we were fortunate to recognise early on is that each new medium eventually evolves its own native journalism and storytelling techniques,” said Blodget. “This medium can’t do some of the things that newspapers and TV can do, but it can do some amazing things that they can’t. One key to our success has been to focus on the latter, and I would certainly advise any other digital news startups to do that.”

It was also quick to go with the changing times. started life as a series of verticals including Silicon Alley Insider and after a year joined forces with Money Game, The Wire and other verticals to relaunch under one brand.

On that note ” take a look around the site, it is quite unFTish in parts ” aggregating as well as reporting means it ends up carrying a huge spread of material, ranging from the latest entertainment news (concentrating on big guns such as Lady Gaga, Kate Middleton) to the latest on hedge funds and stocks, tech and fun sections such as tips on hiring and firing, instant MBAs, and a directory of concepts.

Visa Credit Cards Now Have Different Designs

Consumers, credit card issuers and retailers comparison are flourishing increasingly upset about the probability of fake credit card debt being updated to an account, and right away the world’s tip processor of credit card exchange might have a new deterrent.

In what is being noticed as a change toward a new and more secure sort of credit card, Visa will shortly start arising credit cards for specific variety of accounts that look sufficient not similar from the typical square of cosmetic released in the U.S., according to a inform from the financial news site Main Street. Now, specific Visa credit cards will underline the 16-digit account number, card expiry date and Visa trademark on the back rsther than than the front. The usually pieces of user data that will sojourn on the front of the card are the arising bank’s trademark and the cardholder’s name.

However, Visa is not good with words to exhibit precisely because this change is being made, the inform said.

“In an bid to help our financial institutions search for options to show off their branding chance on Visa cards, whilst progressing the flawlessness and honesty of the Visa brand, you are evaluating refinements that enable is to substitute chain of account data and safety elements by paltry marketplace programs,” a Visa orator told the news site.

So far, usually a such card – the Chase Sapphire card – is fixed to have undergone this makeover, the inform said. A deputy of the bank did note that the change was an extra safety feature, but did not strew light on because putting more user data on the back of the card was more secure than putting it on the front. However, a few experts think that it will help to make sure that the teller who swipes a card will have reduction data confronting them when they do so.

Many experts have advocated that U.S. credit card issuers switch the whole way in that data is stored on these pieces of cosmetic in an bid to make them more secure. Most countries opposite the creation right away use the “chip and pin” card network that stores user data on a microchip embedded inside of the card rsther than than a alluring strip, making the data far more tough to access and replicate.

HarperCollins Buys Thomas Nelson; Corners Religious Book Market

The financial news site, The Street , reports, “HarperCollins, the edition residence of News Corp., will purchase Bible seller Thomas Nelson at a bonus to the $473 million that in isolation equity definite InterMedia paid to take the company in isolation in 2006.”

Based in Nashville, Thomas Nelson is a of the heading traffic publishers in the United States. They are moreover the world’s largest Christian publisher. They supply various forms of Christian literature, Bibles, e-books, journals and digital applications. High form Christian authors such as Billy Graham, Max Lucado, John Eldredge, and Dave Ramsey are amid the list of people they have published. Currently, Thomas Nelson has a #1 bestseller called Heaven Is For Real by Todd Burpo. In add-on to book edition and curriculum, Thomas Nelson moreover does selling is to Women of Faith conference, that is a well-noted women’s eventuality opposite the U.S., often attracting over 400,000 women annually.

Zondervan, other considerable Christian edition company owned by HarperCollins, moreover has a grip on the Christian book market. Some are wondering how the two will fit together beneath HarperCollins given they aim ample of the same audience. Thomas Nelson is the world’s largest Christian publishing house and Zondervan claims to be the world’s tip Bible publisher.

But HarperCollins seems to know what it is doing. In an essay from The Nashville Scene , Betsy Phillips writes, “HarperCollins already owns Zondervan and has the HarperOne imprint. Zondervan’s concentration is on eremite books that go in to Christian bookstores or are used as chapel curricula. HarperOne is directed more at the secular bookstore market. And Thomas Nelson unequivocally hits that honeyed mark correct down the center – carrying out a few very successful titles that allure to the secular bookstore model and being a foundation of the Christian bookstore,” she writes.

Casey Francis, executive of corporate communications for Thomas Nelson, told The Christian Post today, that by HarperCollins’ resources and capabilities, Thomas Nelson “will be able to gain on opportunities” HarperCollins will bring to the company.
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HarperCollins’ Vice President for Corporate Communications Erin Crum didn’t appear disturbed about the Christian publishers working beneath a umbrella. We “will go on to tell both Thomas Nelson and Zondervan. They have interdependent missions,” she said.

The treat between Harper and Thomas Nelson comes roughly 18 months after Kohlberg Co., a in isolation equity firm, paid for the most of Thomas Nelson’s stock. It moreover comes a week after HarperCollins took over a longtime publishing house of Hollywood scripts. They purchased ample of the catalogue of Newmarket Press, that has expelled the scripts of “The King’s Speech,” ”Juno” and many other drive-in theatre in book form.

Billion-Dollar IPO Circus

The IPO marketplace blows in to locale this week similar to a three-ring circus. The monthly calendar has 4 deals seeking to elevate over $1 billion – yes, a billion dollars – and the superstar is the ample hyped Groupon ( GRPN ) IPO.
Everyone has an viewpoint on this firm and investment recommendation on its stock. The financial media is having a margin day stating these opinions/recommendations – for whatever they are worth. But there is a organisation of experts out there not nonetheless listened from – Groupon’s investment bankers. They are muzzled by the “quiet period.”
The Securities Act of 1933 prohibits those entangled in the underwriting and placement of bonds in registration from compelling the company. The statute is an tusk of the years only before the 1929 batch marketplace collision when pump-and-dump schemes were commonplace.
Now this is where it gets tricky. The still time is a 40-day watchful time after an IPO is priced. This relates to the issuer (the firm – Groupon) and its handling underwriters, but it melts down to a 28-day watchful time for any of its other underwriters.
Groupon skeleton to offer 30 million shares at $16 to $18 any to elevate $510 million. The treat is approaching to be labelled on Thursday evening, Nov. 3, to traffic on Friday sunrise on the NASDAQ Global Select Market beneath the draft pitch “GRPN.”
Money, Oil and Fertilizer
In the Broadway low-pitched “Hello, Dolly!” a of the many unforgettable lines from the widow Dolly Levi – mainly if you were fortunate sufficient to see Carol Channing in the purpose – goes similar to this: “Money is, forgive the expression, similar to manure. It doesn’t do any great unless it’s expansion around, enlivening young things to grow.”
Dolly, of course, was on to something. Her thought has at least a mystic couple to the attention sectors – money, oil and manure – represented by the 3 other companies on the IPO monthly calendar this week:
Selway Capital Acquisition is a “blank check” gift that is being carried over from final week. The firm skeleton to offer 2.75 million units at $10 any to elevate $27.5 million. The lead managers are Aegis Capital and Chardan Capital Markets.
Enduro Royalty Trust ( NDRO ) , formed in Austin, Texas, is a certitude that was not long ago formed to own kingship interests in oil and gas prolongation properties in Texas, Louisiana and New Mexico. The firm skeleton to offer 13.2 million units of profitable fascination at $23 to $25 any to elevate $316.8 million. The IPO is approaching to be labelled on Wednesday evening, Nov. 2, and to traffic on Thursday sunrise on the New York Stock Exchange beneath the draft pitch “NDRO.” Joint-lead managers are: Barclays Capital, Citigroup, Goldman Sachs, RBC Capital Markets and Wells Fargo Securities.
Rentech Nitrogen Partners, L.P. ( RNF ), formed in Los Angeles, is a not long ago formed paltry partnership to own, run and blossom a nitrogen manure business. The firm skeleton to offer 15 million shares at $19 to $21 any to elevate about $300 million. The IPO is approaching to be labelled on Thursday evening, Nov. 3, and to traffic on Friday sunrise on the New York Stock Exchange beneath the draft pitch “RNF.” Joint-lead managers are: Morgan Stanley and Credit Suisse.
Out-running the Bear
In summary, there are 4 IPOs on the monthly calendar awaiting to elevate $1.15 billion.
With over $1 billion on this week’s calendar, that raises the question: “Is the IPO marketplace back?”
The answer: Only time will tell. Nevertheless, there are a few clues. Consider the following:
Historically, the IPO marketplace follows the underlying batch market. It is not a leader. You can look at this year as an example.
The U.S. batch marketplace strike its high is to year at the finish of April. The IPO prolongation line followed and carried over in to May. During those 5 months, the monthly calendar constructed 75 IPOs, according to the U.S. Securities and Exchange Commission filings. Then the batch marketplace took a swan dive to its October lows and the IPO marketplace dusty up. No IPOs were labelled in September.
Looking at the stream batch market, it’s value noting: Some gurus have been priesthood that stocks’ new liberation is nothing more than a bear marketplace rally.
The U.S. batch marketplace never slipped in to bear marketplace domain – it came close, but no cigar.
The clarification of a bear marketplace is a 20 percent tumble from its new high. The Dow Jones Industrial Average, deliberate from its shutting high to its shutting low, mislaid 16.8 percent. As of Friday’s close, Oct. 28, the Dow has recovered 14.8 percent from its low. The SP 500 mislaid 19.4 percent from its 2011 shutting high to its shutting low is to year, and it has recovered 16.9 percent. The Nasdaq Composite Index mislaid 18.7 percent from the year’s shutting high to its shutting low and it has recovered 17.2 percent.
No bear marketplace in those numbers.
Mark Twain once said, “If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed.”
If Mark Twain were subsequent to today’s financial news, he would may say “watch TV” instead of “read the newspaper.”
Stay tuned.
Disclosure: Neither the writer nor any person else on the staff has a location in any stocks mentioned, nor do they traffic or deposit in IPOs. The writer and staff do not situation advice, recommendations or opinions.
Disclosure: we have no positions in any stocks mentioned, and no skeleton to beginner any positions inside of the next 72 hours.