Archive for April, 2010
Blackstone Group may ask creditors to restructure $4.94bn of debt remaining from its 2007 purchase of Sam Zell’s Equity Office Properties Trust, according to two people familiar with the discussions.
Blackstone would consider paying down about 5% of the balance and agreeing to a slightly higher interest rate in exchange for extending the maturity, according to the people, who declined to be identified because the talks are private. The debt, which was packaged and sold as a commercial mortgage- backed bond in June 2007, matures in 2012.
While US commercial property values have fallen almost 42% since 2007, the Blackstone properties are generating enough cash to pay the mortgages.
Wells Fargo's first-quarter conference call yielded an interesting personal detail about the banking giant's CEO: He's been underwater on his mortgage, too.
Wells Fargo, the country's largest mortgage servicer behind Bank of America, continues to face difficulty and great costs to help troubled mortgage borrowers stay current. Borrowers in areas where home values have plummeted often owe more to the bank than the home is worth — a status referred to as "underwater" or "upside down." With unemployment still hovering near 10%, many of them are also jobless.
"There [have] been times in my life I have been upside down on a mortgage," CEO John Stumpf said Wednesday, "and if you give people a job, they want to stay in there, they pay."
The government's civil-fraud allegation against Goldman Sachs Group centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in US housing prices.
It was a dizzyingly complex transaction, involving 90 bonds and a 65-page deal sheet. But it all boiled down to whether people like Stella Onyeukwu, Gheorghe Bledea and Jack Booket could pay their mortgages.
They couldn't, and Paulson made $1bn as a result.
UK mortgage approvals gained in March as the effect of the worst cold snap in three decades and higher taxes on property sales faded.
The number of loans for house purchase granted rose to 52,000 from a nine-month low of 48,000 in February, according to a sample from the Bank of England’s panel of lenders released in London today.
Prime Minister Gordon Brown, who’s fighting an election campaign ahead of a May 6 poll, said yesterday the housing market is set to “stabilize” as demand from first-time buyers picks up. Central bank policy makers unanimously kept their £200bn ($309bn) bond-purchase plan on hold this month as they assessed the strength of the economic recovery.
