Articles by Diana Golobay

Hedge fund sees risk in mortgage bonds after 28% gain

Metacapital Management, the hedge-fund firm run by former Lehman Brothers Holdings mortgage-bond trader Deepak Narula, returned 28% in the first half of this year, boosted by government-backed debt that benefits from limited homeowner refinancing. Now the New York-based firm is seeking to protect against one of the "biggest" risks in the $5.2trn market for agency mortgage bonds, Narula wrote in a July 22 letter to investors.
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Wells Fargo to close home mortgage outlets

Wells Fargo Financial in Duluth will soon close, along with the division's 600 locations across the country as Wells Fargo & Co. gets out of the subprime home mortgage business. The branch, at 2220 Mountain Shadow Drive, is one of 13 outlets in Minnesota. Wisconsin has 15. All will close by early September, eliminating more than 2,800 jobs.
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Goldman details its valuations with AIG

Two years after collateral demands from Goldman Sachs Group Inc. helped spark a cash crunch at American International Group Inc. that led to the insurance giant's near collapse, a mystery remains: How did Goldman come up with the mortgage-securities prices it used to extract cash from AIG? The Wall Street firm is now trying to convince its critics that it used accurate prices amid a congressional inquiry into the causes of the financial crisis.
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Greenspan warns home price decline could lead to second recession

Former Federal Reserve Chairman Alan Greenspan said over the weekend that a decline in home prices could derail an already slowing economic recovery and send the US into a double-dip recession. Greenspan's comments follow his successor Ben Bernanke's remarks last week before Congress that the economy remains "unusually uncertain," and that the Fed was readying itself to take new measures if the economy deteriorated further.
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Banks on Europe's edge face $122bn bill

Banks in Europe's most indebted nations need to refinance $122bn of bonds this year, likely paying high interest costs even after receiving a clean bill of health from regulators. Italy's Intesa Sanpaolo has the most debt coming due at $28bn, followed by UniCredit with $21bn.
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Merrill Lynch Veteran Leads CIT Government Relations

CIT Group [stock CIT][/stock] appointed 20-year governmental affairs veteran Margaret Tutwiler as executive vice president and head of government relations. Positions such as these are expected to become more and more common given the heightened regulatory environment. Every large mortgage finance firm will be expected to hire a government liaison to more with Federal compliance officers. She will lead the team that acts as the company's liaison in government affairs, beginning today. She will also head up communications and marketing at the firm.
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DBRS Slashes Ratings on 231 Non-Prime RMBS Deals

Independent rating agency DBRS downgraded certain classes within 231 residential mortgage-backed security (RMBS) deals. Most of the downgrades involve pre-2007 vintages backed by primarily first-lien fixed- and adjustable-rate subprime and Alt-A collateral. DBRS said it downgraded the classes because of continued increases in serious delinquencies and losses relative to available credit enhancement levels.
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