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Company Review: ICICI Bank

noreply@blogger.com (Leon Dev) — Sat, 15 Nov 2008 19:10:00 +0000

ICICI Bank�??s Q2FY09 results showed the impact of the economic slowdown and high interest rates. Advances rose modestly by 7.2% y-o-y, while the net profit remained virtually flat at Rs10.1 billion.

We believe that advances will grow at a moderate pace of 9.2% for the next three years, as against 36.4% in the previous three years, as the Bank is tightening its lending norms and going slow on retail lending to improve its asset quality.

Also, the recent increase in the home loan lending rate is also likely to discourage mortgage demand. In addition, a sizeable international loan portfolio (26% of consolidated advances) may also hurt growth.

We do not expect any improvement in ICICI�??s consistently deteriorating asset quality in the near term, on account of its large exposure to the real estate market (about 28% of the loan book in Q2�??09).

Though the Bank is tightening its lending norms, it would still be exposed to the likelihood of a default on the loans given earlier. Also, the current economic slowdown and high interest rates point towards higher defaults in the upcomingquarters.

We expect the net interest margin (NIM) to fall by about 13 bps in FY09. The Bank is reducing its lending to retail segment, where it enjoys a high margin. In addition, the recent rumours about the Bank going bankrupt may deter new deposits, affecting ICICI Bank�??s plans to garner more low-cost deposits.

Valuation

For ICICI Bank, our target price of Rs563 for FY09E is based on the sum-of-the-parts valuation methodology.

We have arrived at a per-share value of Rs380 for the standalone business, based on the three-stage discounted equity cash flow method and have assumed a 16.51% cost of equity and a terminal growth rate of 6.42% for the same.

ICICI Prudential Life has been valued at a target NBP multiple of 13x. This gives the life insurance business a valuation of Rs95. The AMC has been valued at 7% of its AUM, leading to a valuation of Rs23. We have valued ICICI Securities at Rs24, based on a target P/E multiple of 7x. Other businesses, taken together, have been valued at Rs41.

Source: livemint

A challenging time for Indian bankers

noreply@blogger.com (Leon Dev) — Sat, 15 Nov 2008 19:08:00 +0000

This might sound like perverse logic but the fact is, Indian bankers have never had it so good.

The unprecedented liquidity crunch that is forcing the Reserve Bank of India (RBI) to release money into the system any which way has dramatically changed the dynamics of the business of banking.

Till three months ago, about 80% of the borrowers were accessing money from banks at a rate below their prime lending rate (PLR), at which banks are supposed to lend to their prime customers. Today, only small farm loans and export credit are disbursed at less-than-prime rates (if the bankers are willing to give loans to them) and about 80% of the borrowers are raising money at much above PLR. Even prime borrowers are finding it difficult to get money at prime rates.

�??We are making money with both hands. Till recently, the firms used to bargain hard to get cheap money. Now, we are dictating terms,�?? the chief of a large bank told me last week.

Also Read Tamal Bandyopadhyay�??s earlier columns

His jubilation is understandable, but if all bankers get carried away by greed, they may end up digging their own grave as higher interest rates dent borrowers�?? capability to repay loans. So, banks will accumulate stressed assets. On the other hand, if the bankers listen to finance minister P. Chidambaram and start giving money to every borrower and every business segment in trouble, they will mis-price the risk.

Except for two banks�??Allahabad Bank and Kotak Mahindra Bank Ltd�??most of the listed banks have announced handsome growth in their net profits in the July-September quarter. That�??s good news. But the bad news is their non-performing or stressed assets have started growing and the deterioration in quality of assets will intensify with economic slowdown and rise in borrowing cost for consumers.

A loan turns non-performing when a borrower fails to pay the interest and principal for 90 days, and banks need to provide for such loans.

The gross non-performing assets (NPAs) of ICICI Bank Ltd, India�??s largest private sector lender, rose from Rs9,501 crore in September, from Rs5,932 crore a year ago. For HDFC Bank Ltd, the second largest private bank, gross NPAs have at least doubled, although on a smaller base�??from Rs768 crore to Rs1,676 crore.

Not too many banks, however, have shown much growth in their net NPAs because they have made hefty provisions to cover such assets. ICICI Bank�??s net NPA in September went up to 1.91% of its loans, from 1.43% a year ago. For HDFC Bank, it was 0.60% against 0.40%, and for state-run Indian Overseas Bank, 1.44% against 0.35%.

By any yardstick, the NPA growth is not alarming yet but things can get worse as banks will not be able to make large provisions if their profitability comes under pressure. Besides, when credit growth slows, stressed assets as a percentage of loans will automatically go up.

Strains are already visible in certain sectors such as airline, real estate and non-banking finance companies. Small and medium businesses are also under considerable stress. They are asking for more working capital from banks not because they want to hoard money when liquidity is tight, but because their inventories are piling up. And, there will be trouble with home loan borrowers and credit card holders.

Some of the credit card holders in big cities who had never used their cards to draw cash are now doing that. Typically, the cash withdrawal limit is about 80% of the overall spend limit of a credit card. Consumers are using their credit card to generate cash and meet certain expenses and since most of the them hold more than one credit card with different billing cycles, they are drawing cash through one card and paying it off by using another and taking the credit forward with yet another.

This chain will continue for the next few months before they default on repayment. This will intensify as many professionals are seeing their take-home pay packets shrinking as the variable component of their salary is drastically coming down with the business downturn.

As a result, some are finding it difficult to meet financial commitments such as equated monthly instalments (EMIs) for auto, mortgages and other personal loans, and using their credit cards to pay. In certain segments such as brokerages, real estate firms and non-banking finance companies, retrenchments have started in a small way. This will intensify the pressure.

Banks�?? mortgage portfolios, too, are under strain. With interest rates rising by one-third in past few months, in some cases, the EMI of a home loan is not even covering the interest payment. Typically, at the initial stage, EMIs cover mainly interest and a bit of principal and gradually the interest component goes down. Banks are restructuring EMIs as otherwise the length of home loans will become too long. With realty prices coming down sharply, even in case of a default, banks will not be able to recover their money by selling the flats.

So, they have a tough time ahead. If they increase the rates further (they can always do that despite a cut in their PLR), borrowers will be under severe stress and defaults will rise. And if money is sold cheap, beside hurting their profits, it won�??t justify the risk they are taking by exposing themselves to borrowers who can go bust. Indian banks have not faced such a challenging time before.

Tamal Bandyopadhyay keeps a close eye on all things banking from his perch as the Mumbai bureau chief of Mint. Please email comments to bankerstrust@livemint.com.

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The Benefits Of Good Cheap Mortgages

noreply@blogger.com (Leon Dev) — Sat, 15 Nov 2008 18:56:00 +0000

by Chris Channing

Mortgages might be confusing to most people, and finding a good cheap mortgage can be even harder to understand. A mortgage is a type of homeowner loan that will put the value of the equity of a home against the loan as a type of collateral. Many people get mortgages from every walk of life. The only real requirement is owning a home and having a form of employment or income to repay the loan.

Mortgages deal with real estate and other forms of property. The equity of the property or home will vary from lender to lender, as well as from land to land. The amount in the equity usually is the total amount of which you can borrow against. Of course credit score and other factors can affect how much you borrow from specific lenders.

It is good to get a cheap mortgage because you will save money when you repay it. Cheap mortgages can be classified as a mortgage that has a low interest rate so the repayment is easier and can be done in a smaller amount of time. Many mortgage loans will have cheaper interest rates if your credit score is in great shape. You can make improvements to your credit score can easily make mortgages and other types of loans cheaper for you in the long run.

Many banks will want to discuss your options for mortgage, especially if you have a hot property. Mortgage loans will vary from lender to lender and can have varying interest rates as well. Repayment plans that work well with low interest rates make cheap mortgage loans very appealing.

Interest rates can be determined by many factors. There is a chance that your credit rating may affect your interest rates. You can effectively lower your interest on your mortgage when you improve on your credit score. Try to pay off your existing debts if you can and also try to get yourself in good standing for your credit will lower your interest on a mortgage loan.

The internet is a great place to find a great deal on a mortgage. You can always do some comparison shopping on loan rates and get quotes from the various lenders out there. Many lenders even compete for you on certain websites.

An Overview Of An Asset Based Mortgage

noreply@blogger.com (Leon Dev) — Sat, 15 Nov 2008 18:55:00 +0000

Though most potential homeowners are most familiar with traditional mortgages where the property being purchased serves as collateral for the loan, this is not the only type of mortgage that is available. One alternative form of mortgage that you may qualify for is the asset-based mortgage; in these loans, the mortgage is not guaranteed by the property, which is being purchased but is instead secured by other assets, which the borrower provides. There are some advantages to choosing an asset based mortgage loan over a traditional mortgage, though this loan type comes with some restrictions as well. Here is a look at the basics of an asset based mortgage, so as to help you determine whether or not one of these loans is right for you.

Asset based mortgages can be very useful for individuals that have little or no credit as well as those who have bad credit. While in most cases these individuals may not be able to qualify for a traditional mortgage loan, the value of the assets that they offer for collateral should be enough to qualify them for an asset-based mortgage regardless of what their credit rating might be. This can be very useful for those who are trying to purchase their first house while still trying to start out financially. It is also useful for those who have run into financial problems in the past and anybody that is trying to reestablish their credit now that they have gotten back on their feet. Though credit is taken into account, for most asset based mortgage lenders it is not nearly as important as it would be for most other types of loans.

Another difference between asset based mortgages and other mortgage loans is that in many cases there is no down payment required when securing the loan. Though the borrower still has to pay a portion of the total cost of the property, the loan itself will not contain many of the same costs that taking out a traditional mortgage would entail. Though the availability of this specific feature of asset-based mortgages may vary from one lender to another, a number of lenders offer the no down payment feature as one of the attractions of this type of loan over mortgages that are more traditional. The fact that the collateral for the loan is worth more than the amount that is being borrowed and does not require the lender to find a buyer for the house or other property in order to make their money back greatly reduces the need for a down payment or other forms of payment when the loan is issued.

Unlike most mortgage loans, those which are based off of external assets may not have the same income requirements that are required by more traditional loans. Some individuals who take out an asset based mortgage will only apply a portion of the borrowed money toward the purchase of a house or other property itself, keeping anywhere from five to fifteen percent of the amount set aside to assist in repaying the loan itself. This can be especially useful when trying to guarantee that you will be able to afford the mortgage payments if you are worried about the possibility of layoff or may be moving to a new area where you might not be able to locate a job immediately. Though setting aside some of the borrowed money can mean that you may have to borrow more than you actually need, the buffer amount can help you to avoid a default and it should make the overall loan amount much easier to pay back.

Asset based mortgage loans do have their disadvantages, of course. In most cases these loans cannot be taken out for the full amount that you will need to purchase the property. Most asset-based mortgages can only be taken out for fifty percent of the propertyв�?�?�s total value or less, though some lenders allow the loan to be for up to sixty-five percent or higher. This is because of the high value of homes and similar property, as well as the fact that those with little credit or who have had bad credit in the past are more likely to default on their loan payments than individuals who have established good credit.

Many asset-based mortgages are used in the purchase of homes and property that are going to be resold after restoration or that are being purchased at a discounted rate; the borrower in these cases is hoping to finalize the sale of the property before the loan is due in full. Though this can be risky since not all homes sell quickly, when it works it allows them to repay the loan easily while still making a sizeable profit off of the property in question.

Mike Cole is a freelance writer who writes about topics and financial products pertaining to the mortgage industry such an adjustable rate mortgage available from a mortgage lender.

Advice For Researching Mortgage Rates Online

noreply@blogger.com (Leon Dev) — Sat, 15 Nov 2008 18:52:00 +0000

The internet can be very useful for those individuals who are in the market for a mortgage loan, allowing them not only to borrow money from lenders who operate online but also to find more information about potential loans before they actually commit to a specific lender. While not all borrowers take the time to research mortgage rates online, those who do can often find competitive if not superior rates. These rates can be superior when compared to those that would be found after simply visiting a few different mortgage lenders in their local area. If you have been looking to learn how use the internet to help you research mortgage rates before committing to a loan, then this information should assist you in being able to make an informed decision when you borrow.

One of the first things that you should do when researching mortgage rates online is to spend a few minutes finding out what the national average rate is for a mortgage loan. Mortgage rates fall under federal regulation, but they may still vary from one location to another; by discovering the national average you can get a better idea as to whether the rates in your area are above or below the average. This in turn helps you to decide whether you can be better served by using a local mortgage lender or if you would be better off to expand your search to lenders in some other areas (or to focus more on lenders who operate primarily or exclusively online.)

Once you have determined what the national average is for interest rates, take a little bit of time to shop around online for properties in your area. While you may already have a specific property in mind when you start looking for a mortgage loan, this may give you a better idea of how much homes and other property in your area is selling for and may assist you in negotiating a better purchase amount for the property that you buy. Once you know both the average national mortgage rate as well as the average rate of properties in your area, you should be in a much better position to shop around for a good deal on both the property that you buy and the mortgage loan that you use to buy it.

When using the internet to research mortgage rates, do not forget that most if not all of the mortgage lenders that you might be considering should have websites that you can visit. Not only can this help you to find out more about the lenders themselves, but in some cases you may be able to learn things about their lending policies that you might not have known previously. Many of these mortgage lenders may also give you access to valuable tools on their websites, such as mortgage calculators that can help you to develop an estimate of both your likely interest rate and how much you should have to pay each month for your mortgage at that rate.

Some mortgage lenders choose to operate primarily or exclusively online, so when researching mortgage rates online you may find yourself with access to lenders that you would not be able to use otherwise. By requesting loan rate quotes from these online lenders, you should have a chance to expand your search for a good mortgage rate while gaining a better idea of whether the quotes that you have received from local lenders are the best that are available to you. You may find that you have gotten a truly exceptional rate quote from one or more of the lenders that you have already considered, or you might discover that you can find lower rates by shopping elsewhere.

One other important advantage of using the internet to research mortgage rates online is the fact that you can often find out the information that you want quickly. Many online mortgage lenders offer instant quotes that are calculated and sent to you via email, and their rate information is updated daily to stay up-to-date with the latest federal mortgage rates. There may be some discrepancies between what is displayed on the website and what rate is available. This is why is it best to request a quote because mortgage rates can change often. Online lenders and other mortgage information websites are generally able to get you the information that you want quickly and without having to deal with lending officials for every question that you might have. You can even spend your down time at night finding out more information about your mortgage rate options, freeing up your time during the day and not making you have to adjust your schedule just to find out the information from local lenders when they are open.

Mike Cole is a freelance writer who writes about topics and financial products pertaining to the mortgage industry such an adjustable rate mortgage available from a mortgage lender.

Investors holding up mortgage modifications

mr.krunalsoni@gmail.com (Krunal Soni - SEO Expert Ahmedabad) — Sat, 15 Nov 2008 18:14:00 +0000

NEW YORK �?? The federal government keeps bailing out the financial industry, but some working in that world seem reluctant to do their part, even if that could help stem the financial system's meltdown.

At the center of today's economic and credit crisis is the rising tide of home foreclosures, which government agencies and some large banks are trying to address by allowing borrowers to modify their mortgages.

But their efforts are likely to fall short because those entities don't control most of the nation's worst-performing loans. Instead, investment groups worldwide do, and representatives of some of them have been resistant at making such changes because it could crimp returns.

While experts say breaking that deadlock is one of the keys to solving the mortgage mess, the tenor of testimony at a congressional hearing this week left little room for optimism.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said legislation may be needed to resolve these issues. That could mean directing investors and mortgage loan servicer firms to act, rather than waiting for them to come to some consensus.

While we wait, though, the foreclosure problem only intensifies. New data from RealtyTrac Inc. shows that foreclosures surged by 25 percent last month from year-ago levels. One in every 452 housing units in the nation was the subject of a foreclosure filing, such as a default notice, auction sale notice or bank repossession.

All of this is an unfortunate legacy of the trend in recent years of banks selling, rather than keeping in their own loan portfolios, most of the mortgages they originated. The buyers, including Fannie Mae, Freddie Mac and Wall Street firms, would then slice and repackage them into securities sold to investors worldwide.

This process, known as securitization, was designed to diversify risk, regardless of movement in home prices. It also added liquidity to the mortgage market, helping fuel the surge in lending this decade.

But the good times broke down once the weakness in mortgage underwriting standards became clear as homeowners began to default on their loans at alarming rates. That led to plunging prices for such securities, and caused a broad fallout in every corner of the financial world as liquidity dried up and investors shunned all risk.

Today, about 80 percent of the $1.8 trillion in outstanding troubled mortgage loans belong to investors, according to Deutsche Bank. The rest are considered "whole loans," held by banks or government-run mortgage giants Fannie Mae and Freddie Mac.

Most of those involved in the mortgage-backed securities market agree that loan modifications usually are less costly than disposing of foreclosed property. But they claim the fine print of their contracts and all the conflicting parties involved inhibit them from working with homeowners.

They took that message to Washington on Wednesday when representatives from the hedge fund industry, the securitization market and loan servicers testified before Congress about the legalities that require them to act in their investors' best interests.

"Mortgage servicers report to trustees, which have fiduciary duties to the investors in (mortgage-backed securities) pools," said Benjamin Allensworth, the senior legal counsel to the Managed Funds Association, told Frank's committee. "Similarly, institutional investors holding (mortgage-backed securities) also have fiduciary obligations to their clients."

Michael Gross, managing director of Bank of America's loan administration loss mitigation unit, added that some contracts prohibit changes to the underlying mortgages. But Thomas Deutsch, deputy executive director of the American Securitization Forum, said there are options, and his group is reviewing ways to get more modifications done.

What's clear is that contract law is preventing the companies from easily or quickly bending on this issue, and the government to date hasn't done anything to compel them to act differently.

"We can spend billions to bail out Wall Street, but this shows there is little interest in doing anything to really help American families," said John Taylor, president and CEO of the National Community Reinvestment Coalition.

One solution would have been to have the government buy up the toxic mortgage securities under the $700 billion bailout law, but Treasury Secretary Henry Paulson ruled that out as an option on Wednesday.

Another option that could break this logjam was floated Friday by the Federal Deposit Insurance Corp., which wants to use $24 billion in government funds to guarantee 2.2 million modified loans through the end of next year. Borrowers would get reduced interest rates or longer loan terms to make their payments more affordable.

The FDIC hopes government backing will make the lending industry more willing to modify loans because taxpayers will absorb half of the losses if the borrower defaults again. Also, loan servicing companies would be paid $1,000 for each loan they modify.

But before that can happen, FDIC Chairman Sheila Bair would need to convince Secretary Paulson to reverse his opposition to using money from the $700 billion bailout fund for this purpose. Or she'd have to convince Congress to order him to do so.

However that dispute plays out, the government needs to find a solution, and quick.

Source: mercurynews

U.S. spells out new regulatory plan

noreply@blogger.com (Leon Dev) — Mon, 31 Mar 2008 18:00:00 +0000

WASHINGTON: Treasury Secretary Henry Paulson revealed sweeping plans on Monday for streamlining a hodgepodge of regulations that are blamed for allowing the U.S. mortgage crisis to balloon into a full-blown economic threat.

The proposals, in the form of a 218-page "blueprint" that was started before markets unravelled in August, offer no quick fix for the credit contraction that threatens to tip the U.S. economy into recession.

Under the proposals, the current patchwork of as many as seven federal regulators would be consolidated under three agencies: the U.S. Federal Reserve, a newly created financial regulator and a third agency for consumer protection and business practices.

Paulson acknowledged that most of the proposals would not be enacted until after the current troubles had passed, perhaps long after President George W. Bush leaves office in January.

The regulatory blueprint proposes eventually vesting new powers in the Federal Reserve as a "market stability regulator" -- effectively formalizing a role the central bank already has adopted recently by expanding the list of financial firms which can borrow directly.

It would give the Fed authority to demand that all financial system participants supply it with full information on their activities and grant the Fed a right to collaborate with other regulators in setting rules for their behaviour.

The Bush administration has faced political pressure from critics who blame lax regulatory oversight for the mortgage mess. Paulson, a 30-year Wall Street veteran, stressed that regulation must be light enough to keep markets innovative, and said those who tried to label the blueprint as advocating more or less regulation were "oversimplifying."

"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years," he said.

"I am suggesting that we should and can have a structure that is ... more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions, one that will better protect investors and consumers, and one that will enable U.S. capital markets to remain the most competitive in the world," he said.

DEBATE BEGINS

In a nod to the likely turf battles to come, a Treasury official said the department was "trying not to let the political challenges shape how we see things."

The plan was already meeting some resistance from Capitol Hill and competing corners of the government bureaucracy as a potentially protracted debate took shape.

Walt Lukken, acting chairman of the Commodity Futures Trading Commission, which under Treasury's plan would be merged with the Securities and Exchange Commission, said the CFTC had specialized expertise that could be "jeopardized" in a larger regulatory agency.

Sen. Christopher Dodd, the Connecticut Democrat and chairman of the influential Senate Banking Committee, said the plan did not address the root problems.

"To talk about overhauling the regulatory system is a wonderful idea. But frankly it doesn't relate to the issues we're grappling with," Dodd told reporters on a conference call. "It's not even close to the strike zone."

On Wall Street, there was little immediate reaction as investors concluded that it would be quite some time before any substantive changes were made.

"Since most of what's in the Treasury plan will take new law, its fate will be determined by another Congress with a new President in a different financial market two years from now," said Karen Shaw Petrou, managing partner of Federal Financial Analytics in Washington.

Since problems surfaced in August with rising failure rates on subprime mortgage loans to less credit-worthy borrowers, credit markets have come near seizure several times. Public anger has mounted at what was perceived as slack enforcement of existing rules.

Many mortgage loans were made without basic fact-checking. Some lenders did not verify whether borrowers actually earned the incomes they claimed or whether they were steered into inappropriate loans with low initial "teaser" rates that soon reset higher, requiring much larger monthly payments.

Treasury also recommends getting rid of a Depression-era charter for thrifts, which was intended to make it easier to obtain mortgage loans, saying it is no longer necessary. That would mean closing the Office of Thrift Supervision and transferring its duties to the Office of the Comptroller of the Currency, which oversees national banks.

In one important change to try to clamp down on mortgage brokers, the Treasury is urging the establishment of a "Mortgage Origination Commission" made up of regulatory agency representatives that would be able to set licensing standards for mortgage brokers.

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Countrywide Financial mortgage loan production sank 48 percent in October

noreply@blogger.com (Leon Dev) — Sun, 11 Nov 2007 19:02:00 +0000

LOS ANGELES: Countrywide Financial Corp. said Tuesday its level of home loan production fell by almost half last month from the same month last year, while the percentage of delinquent loans rose as the mortgage lender continued to grapple with the fallout from the U.S. housing slump.

Countrywide, the largest U.S. mortgage lender, generated $21.9 billion (�?�14.99 billion) in mortgage loan fundings in October, down 48 percent from $41.8 billion (�?�28.62 billion) the year-ago month.

Total fundings rose 4 percent from September, the company said.

In all, the lender originated 117,430 home loans during the month, down from 230,196 in October 2006.

Following the collapse of the subprime mortgage market Countrywide dramatically cut back on originating such loans, which are typically made to borrowers with past credit problems.

The company's subprime mortgage fundings posted the biggest decline from a year ago, plummeting almost 99 percent, to $42 million (�?�28.75 million) last month from $3.25 billion (�?�2.22 billion).

Home equity loan originations totaled $1.35 billion (�?�0.92 billion), down 68 percent from $4.29 billion (�?�2.94 billion) in October 2006.

Countrywide's slate of adjustable rate mortgages �?? among the most popular type of loan in recent years �?? fell almost 80 percent, to $3.09 (�?�2.12) from $16.25 billion (�?�11.12 billion) a year earlier.

In all, Countrywide had mortgage applications waiting to be processed worth about $41 billion (�?�28.07 billion) as of Oct. 31, down from $61 billion (�?�41.76 billion) in the year-ago month.

As of Oct. 31, the company's mortgage loan servicing portfolio was valued at $1.47 trillion (�?�1.01 trillion), up 16 percent from October last year. The company services loans originated by other lenders.

The company said some 5.89 percent of the loans in its servicing portfolio were delinquent last month, up from 4.43 in the year-ago period. About 0.89 percent of the mortgage loans were pending foreclosure, up from 0.56 percent.

Countrywide noted that more than 90 percent of total loan originations, which includes commercial real estate lending, were funded through its banking subsidiary, Countrywide Bank.

Assets at the bank, which experienced a rash of withdrawals in August as some customers feared their deposits might be lost if the mortgage lender went under, stood at $106 billion (�?�72.57 billion) at the end of last month, up from $83 billion (�?�56.82 billion).

Shares of Countrywide rose 53 cents, or 4 percent, to close at $13.72 Tuesday.

___

On the Net:

Countrywide Financial: http://my.countrywide.com/

Subpoena Issued to Beazer Homes on Mortgage Loans

noreply@blogger.com (Leon Dev) — Fri, 30 Mar 2007 17:57:00 +0000

Beazer Homes USA, one of the largest home builders in the country, said yesterday that it had received a grand jury subpoena from a United States attorney�??s office, which is seeking documents related to its mortgage origination business.

The company said in a filing with the Securities and Exchange Commission that the subpoena came from the United States attorney�??s office in the Western District of North Carolina. Beazer said it was cooperating with the investigation.

A representative at the F.B.I. office in Charlotte, N.C., said this week that the agency was �??conducting a potential fraud investigation�?? into Beazer, a company that builds houses for many first-time buyers.

The company, based in Atlanta, said it had not received a request for information or documents from the F.B.I. or the Internal Revenue Service.

Beazer has said that the United States attorney�??s office has made no accusations of wrongdoing by the company, and that the statements made by an F.B.I. spokesman about an investigation and the scope of the investigation were unauthorized and should not have been made.

According to BusinessWeek�??s online edition, the inquiry stems from a series of articles that appeared in The Charlotte Observer this month. The articles described questionable lending origination practices and high foreclosure rates among some Beazer customers in the Charlotte area. Beazer says it has found no evidence to support the accusations in the articles.
Source: nytimes.com