Actual finance blog

Stocks are ending mixed after four days of declines brought on by talks over bailing out Ireland.

Retail stocks are among the day’s biggest gainers. Shares of Target Corp. are up 3.8 percent after the Minneapolis-retailer reported earnings that beat analysts’ expectations. Macy’s, JC Penny Co. and Costco all rose by 2 percent or more.

According to preliminary calculations, the Dow Jones industrial average is down 16, or 0.1 percent, to close at 11,008.

The S&P 500 is up less than 1 point to 1,179. The Nasdaq composite is up 6, or less than 0.1 percent, to 2,476.

Two shares rose for every one that fell on the New York Stock Exchange, where floor volume came to 954 million shares.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) _ Stock markets steadied themselves Wednesday after four days of declines as Ireland discussed a bailout with the European Union and Britain pledged support to help the struggling country.

The Dow Jones industrial average fell 1 point in afternoon trading, a day after the index posted its biggest loss since Aug. 11. Broader indexes rose slightly as energy and materials stocks rebounded and commodity prices edged higher.

A tame inflation report and another weak reading on the housing market did little to draw attention back to the U.S. economy. Shares of homebuilders including D.R. Horton Inc. and PulteGroup Inc. fell about 1 percent after the disappointing housing report came out.

Stock markets have been rattled around the world over the past week out of fear that Ireland will become the latest European country to need a bailout. Greece was bailed out in May after it became unable to contain runaway spending and lost the confidence of investors. Ireland is now struggling after a collapse in its housing market forced the country to take over three large banks payday loans.

“They’re going to backstop (Ireland) one way or another,” said Larry Rosenthal, president of Financial Planning Services in Manassas, Va.

Britain, which is not part of the 16-nation bloc that uses the euro, on Wednesday offered to provide additional support to Ireland beyond any help it gets from the European Union or the International Monetary Fund. That helped steady markets in Europe.

British banks would be among the hardest hit by an Irish default because they are among the largest holders of Irish bonds. Shares of HSBC and Barclay’s edged higher Wednesday.

Investors are concerned that a failure in Ireland could be just another step in a string of bailouts needed to help governments throughout Europe. Traders are also worried about big government debts in Portugal, Spain and Italy.

The euro rose slightly against the dollar Wednesday, but remains near its lowest level since late September.

The Dow fell 1.02, or less than 0.1 percent, to 11,022.48 in afternoon trading.

The Standard & Poor’s 500 index rose 2.72, or 0.2 percent, to 1,181.06. The Nasdaq composite index rose 13.62, or 0.6 percent, to 2,483.46.

Britain’s FTSE 100 rose 0.2 percent after falling earlier in the day. Germany’s DAX gained 0.6 percent, while France’s CAC-40 rose 0.8 percent.

Bond prices traded in a tight range. The yield on the 10-year Treasury note, which moves opposite its price, was unchanged at 2.85 percent compared with late Tuesday. Its yield is used as a benchmark for interest rates on mortgages and other consumer and corporate loans.

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Arch Coal Inc., the nation’s second-largest coal producer, has reportedly “expressed an interest” in rival Massey Energy Inc., the owner of the Upper Big Branch mine in West Virginia where 29 workers died in an April blast.

The New York Times reported Creve Coeur-based Arch as a potential suitor for Massey.

The newspaper, citing an unnamed source, said Massey has already received an offer from Alpha Natural Resources. Buyout rumors have been swirling around Massey for weeks, helping drive up the company’s stock price.

Massey CEO Don L. Blankenship on Wednesday said at an investor conference that any takover bids will be “fully vetted” by the company’s board.

Kim Link, an Arch Coal spokewoman, said the company “does not comment on M&A speculation.”

Beside Arch, steel giant ArcelorMittal is also said to have interest, according to the Times. Other reports indicate Coal India Ltd. is considering purchasing a mine from West Virginia-based Massey.

 

 

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Leaders from 21 Pacific Rim economies converged on Japan on Saturday for an annual summit to push for free trade, hoping for a show of unity after rancor over currencies soured the Group of 20 meeting a day before.

President Barack Obama, Chinese President Hu Jintao and other leaders of the Asian-Pacific Economic Cooperation forum were expected to agree to take steps toward a Pacific-wide free trade zone.

Obama’s failure to conclude a free trade agreement this week with South Korea, and the G-20’s refusal to go along with the U.S. stance of formally criticizing China’s controls on its currency highlighted reduced U.S. influence in the region _ at least on economic issues.

But in broader issues of diplomacy, Japan and others in the region are looking to the U.S. for a counterweight to China’s increasingly aggressive stance on many issues.

Most notably, relations between Japan and China are strained by conflicting territorial claims over islands in the East China Sea. That dispute flared up as the two sides squabbled over an incident in which a Chinese trawler collided with two Japanese coast guard vessels near disputed islands east of Taiwan.

With the mood still frosty, it remained unclear if Hu would meet with host Prime Minister Naoto Kan during his visit.

“If you talk to people in this region, they would tell you they are making very, very strong requests from this part of the world asking the U.S. to be more deeply involved,” said Ding Xueliang, a China expert at Hong Kong’s University of Science and Technology.

Tokyo’s ties with Moscow also are strained after Russian President Dmitry Medvedev visited an island off the northern coast of Japan that both nations claim. Kan was expected to meet with Medvedev later Saturday.

Obama, on the last stop of a four-nation Asian tour, vowed to deepen U.S. engagement in the region.

“America is leading again in Asia,” he said at a business conference on APEC’s sidelines, reaffirming his government’s desire to double U.S. exports in the next five years. “In this region, the United States sees a huge opportunity to increase our exports in some of the fastest-growing markets in the world.”

Kan, meanwhile, vowed to open Japan’s sluggish economy further for the sake of future growth, despite protests from farmers who fear the loss of subsidies and protective tariffs.

“We have to grow with the fast developing economies of the Asia-Pacific,” Kan told the business conference.

As a precaution against protests from farmers and other disruptions, some 21,000 police were standing guard near the summit venue in Yokohama, which 150 years ago was one of the first Japanese ports opened to foreign trade _ under pressure from American warships cash advance no fax.

The fractious G-20 summit in Seoul, South Korea, ended with an agreement to refrain from “competitive devaluations” but no consensus on a U.S. push to get China to let its currency rise.

The ill-will from that meeting threatened to carry over to the APEC talks, though currencies are not on the official agenda. About half the leaders from the G-20 meeting are attending APEC, which represents more than half the world’s GDP.

Still, the weekend summit in Yokohama is likely to be less contentious thanks to APEC’s informal nature and the widespread consensus among all attending about the need for freer trade.

“There is no pressure to be aggressive because it’s nonbinding,” said Philippine Foreign Undersecretary Antonio Rodriguez. “That’s the beauty of APEC.”

Washington accuses Beijing of deliberately keeping its currency, the yuan, weak to gain a trade advantage. That stance has been undermined, however, by the U.S. policy of printing money to boost the sluggish American economy, which is weakening the dollar and provoking complaints from Brazil, Germany and China.

Hong Kong’s chief executive, Donald Tsang, said Friday he fears the U.S. Federal Reserve’s decision last week to buy up $600 billion in U.S. debt last week, keeping interest rates low and the dollar weak, could flood emerging markets with cash seeking higher returns.

“International investors should tighten their seat belts and get prepared for unprecedented turbulence in currency markets, bond markets, stock markets and the property market,” Tsang told a business conference on APEC’s sidelines.

APEC, founded in 1989 to promote regional integration, aims to move toward creating a Free Trade Area of the Asia-Pacific, or FTAAP, including all its 21 economies and more than half of all world business.

Such a trading bloc might help harmonize various smaller trade, but it would not be forged by APEC itself, which is not a negotiating body.

Such a goal would likely be built from existing free trade agreements, such as the U.S.-backed Trans-Pacific Partnership, or TPP. It now includes only four small economies _ Brunei, Chile, New Zealand and Singapore _ but the U.S., Australia, Malaysia, Vietnam and Peru are in talks to join them.

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Robo-signing is just the tip of the iceberg.

The revelation that loan servicers were rapidly signing foreclosure documents without even reading them has uncovered a morass of serious paperwork problems.

These issues could potentially prevent some foreclosure cases from proceeding and allow delinquent borrowers to stay in their homes indefinitely or wrangle settlements from their servicers.

"The whole robo-signing scandal has caused many judges to mistrust what servicers are saying in foreclosure petitions," said Patricia McCoy, a law professor at the University of Connecticut, who co-authored "The Subprime Virus." "Many judges will scrutinize filings more closely."

Several major banks have halted their foreclosure proceedings while they review their process and paperwork. However, several, including Bank of America (BAC, Fortune 500), are ready to continue the cases, saying they are confident that their methods are sound.

But servicers could still hit some big paperwork potholes in answering what seems like the simplest of questions: Who owns the loan and who has the right to foreclose?

First, a quick primer.

The debt taken out to buy a house is called a note, which is similar to an IOU. The mortgage pledges the property as collateral to pay off that debt.

When mortgages are bundled together into securities that are sold to investors, the notes are then transferred to a trust. The investors in that trust become the owners of the note and the holders of the mortgage.

Now for the problems.

The note: One of the most important documents in this foreclosure fiasco is the note, which gives investors the right to take action against delinquent borrowers.

The problem is that many servicers don’t know where that piece of paper is. Or, they didn’t transfer it properly to the trust that holds the securitized mortgages.

This could prove to be a possibly fatal problem for financial institutions.

Until now, many courts were lax about requiring servicers and investors to produce the actual note. Judges allowed the financial institutions to simply provide affidavits saying the investors owned the note.

Now that the robo-signing scandal has surfaced, more judges want to see the note.

In those cases, "the banks will have a big problem," McCoy said. "I don’t see how the foreclosure can go forward."

The American Securitization Forum, an industry group, said that the standard industry methods of transferring ownership of mortgage loans to securitization trusts are sufficient and appropriate.

"These concerns are without merit and our membership is confident that these methods of transfer are sound and based on a well-established body of law governing a multi-trillion dollar secondary mortgage market," said Tom Deutsch, the forum’s executive director.

The mortgage: The mortgage industry is slamming into a digital wall.

State law requires that mortgages be recorded in county offices so homeowners and the general public can see that there is a debt on the property.

But as mortgage securitizations began to boom in the 1990s, servicers sought to digitize and centralize the paperwork surrounding the bundling and selling of the loans. So they created the Mortgage Electronic Registration System, known as MERS, to serve as a repository to show both the owner of the note and the home that serves as its collateral.

About 60% of the nation’s residential mortgages are now recorded in MERS’ name, according to Christopher Peterson, a law professor at the University of Utah who wrote a recent paper on the issue.

When a homeowner falls behind on payments, the company often brings the foreclosure suit to court on behalf of the servicer and the investors who own the debt.

This has become a problem because some judges are questioning MERS’ right to represent the owners of the note.

"An increasing number of courts have begun taking a dim view of MERS-recorded mortgages and deeds of trust," wrote Peterson in his recent paper.

If judges don’t recognize MERS’ right to bring the foreclosure suit, they could throw out the case.

But this problem can be rectified. The trustee can bring suit on behalf of the investors, McCoy said, though this involves more time, paperwork and filing fees.

MERS said it has prevailed in previous legal challenges to its authority.

"The MERS process of tracking mortgages and holding title provides clarity, transparency and efficiency to the housing finance system," said R.K. Arnold, the company’s chief executive. 

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Hillsborough Area Regional Transit has received the 2010 Outstanding Public Transportation System Achievement Award from the American Public Transportation Association. The award is based on ridership growth, customer service, safety, financial management and community involvement.

HART won among transit agencies with from 4 to 20 million annual passenger trips. HART is in middle of that pack, with nearly 12.3 million riders in fiscal 2010, which concluded Sept. 30. The ridership total is a 5.4 percent increase over fiscal 2009. HART also provided another 581,000 trips on streetcars and paratransit vans.

“This is a motivator as we lead the way in transportation improvements,” HART Chief Executive Officer David Armijo said at a morning ceremony outside the agency’s Ybor City offices and streetcar barn Oct. 15. Armijo, who joined HART in 2007, credited the agency’s 761 employees in helping win the award.

The APTA award couldn’t arrive at a better time for the 31-year-old transit agency. Early voting begins Monday for the Nov. 2 referendum that, if approved, would provide a dedicated sales tax to double the size of HART’s bus fleet and build a light-rail system.

Hillsborough County Commissioner Mark Sharpe predicted “the referendum will pass,” which will bring even more attention to HART.

“We are going to have to be sure all the things that we do resonate with excellence,” Sharpe said. The naysayers are out there. We will show them how great HART is and can be.”

APTA President William Millar said he also expects the Hillsborough referendum will pass because 70 percent of transit referendums nationwide have been approved since 2000.

“After all these years Tampa will be catching up with the rest of the country and leading them very soon,” Millar said.

“If you want good things to happen, you have to pay for them,” Millar said. “Voters are willing to support things of quality, and you have quality here in HART.”

A total of 81 transit agencies nationwide are in the 4 to 20 million annual rider category. An APTA spokeswoman said the organization does not reveal how many applied for award.

Last year, Intercity Transit of Olympia, Wash., won the award for mid-sized transit agencies. Other previous winners in the category have included Richmond, Va., and Lansing, Mich.

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The Washington Business Journal is pleased to announce the following honorees in its 2010 Women Who Mean Business Awards:

• Mary Abbajay, Principal and co-founder, Careerstone Group, LLC
• Laurie Battaglia, Executive VP and Managing Director, CQ-Roll Call Group
• Cynthia Castillo, President & CEO, CSSI, Inc
• Linda Chatman Thomsen, Partner, Davis Polk & Wardwell LLP
• Frances Crespo, Owner, The Full Cup
• Charlene Dukes, President, Prince George’s Community College
• Heather Burnett Gold, Senior VPof External Affairs, XO Communications
• Ellen Kassoff Gray, Co-owner, Equinox
• Ludy Green, President and Founder, Second Chance Employment Services
• Susan Haller, Vice President of Litigation, Sprint Nextel Corp.
• Lisa Hook , CEO, Neustar, Inc.
• Holly Jones, Senior VP, Corporate Solutions, Jones Lang LaSalle, Inc.
• Lisa Kazor, President, CEO and Acting COO, of Savantage Solutions
• Kathy Korman Frey, Founder of Hot Mommas Project and Vision Forward, LLC
• Debra Lacy, Founder, President and CEO of Lacy, Ltd.
• Mary Naylor, CEO of VIP Desk, Inc.
• Denise Pope, Mid-Atlantic market executive of Capital One Bank
• Elizabeth Price, President of the NoMa Business Improvement District.
• Sherry Rhodes, VP & Secretary; Chief Ethics & Compliance Officer, Noblis, Inc.
• Michele A. Roberts, Partner, Akin Gump Strass Strauss Hauer & Feld LLP
• Argelia Rodriguez, D.C. College Access Program, President & CEO
• Kimberly Russo, COO, George Washington University Hospital
• Danielle Saunders, President and founder, Accelligence LLC.
• Kitty Saylor, CEO, Rehau North America
• Rebecca Schulte, Senior VP & GM, Comcast SportsNet Mid-Atlantic

Honored individuals will be profiled in the Nov. 19-25 print edition of the Washington Business Journal.

Washington Business Journal, along with sponsors McGuire Woods, SAP, and SunTrust Bank, will recognize the honorees at an evening awards program to be held Nov. 18 at the Mandarin Oriental in D.C.

More information.

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Old Florida National Bank and Mercantile Capital Corp. have entered into a merger agreement expected to be finalized in the late fourth quarter or early first quarter of 2011.

Orlando-based Old Florida National Bank, formed in 1982, currently operates eight full-service retail banking locations throughout Central Florida and Inverness, Fla., with more than $375 million in assets.

Mercantile Capital Corp., a 7-year-old Altamonte Springs firm that specializes in U.S. Small Business Administration 504 loans, has provided commercial loans in 30 states and Puerto Rico for more than $513 million in total project costs since it opened as Mercantile Commercial Capital LLC in late 2002.

“The merger substantially extends Old Florida’s capacity to engage in commercial lending,” said Old Florida Chairman Randy Burden personal loan for poor credit.

Christopher G. Hurn, chief executive officer of Mercantile Capital Corp., said the merger also enables Mercantile to expand its services and help more small business owners nationally.

“Our merger substantially expands the capital resources we can bring to the small business sector of the U.S. economy,” said Hurn.

Under the terms of the merger, Mercantile Capital Corp. will operate as a wholly-owned subsidiary of Old Florida National Bank.

The combined entities are estimated to have nearly $400 million in total assets upon completion of their merger, making Old Florida one of the largest Orlando-based community banks.

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Outcast Communications co-founder Margit Wennmachers has reportedly joined Silicon Valley venture capital firm Andreessen Horowitz as a partner.

The Wall Street Journal's All Things Digital blog reported that Wennmacher will join Marc Andreessen and Ben Horowitz in September as the firm's third partner, specifically advising it on marketing.

Wennmachers co-founded San Francisco-based OutCast in 1997. The firm was acquired in 2005 by London-based Next Fifteen Communications payday advance. Co-founder Caryn Marooney and the other five members on the management team will remain at the firm.

“For me, it’s a chance to build a top-notch VC firm and work with talented entrepreneurs, so what’s not to like?,” All Things Digital said that Wennmachers wrote in an email.

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Booyah Inc. said on Monday that it has raised a $20 million round of funding led by Accel Partners.

The Palo Alto-based company has a popular app for Apple Inc.'s iPhone called MyTown, a game in which users "check in" at physical locations to move ahead. It has an estimated 2 million users and is reportedly growing at a rate of 100,000 users a week.

Cofounder and CEO Keith Lee said the company plans to use the money to expand its work force and invest in to-be-announced new projects.

In addition to Palo Alto-based Accel, existing investors Kleiner Perkins Caufield & Byers of Menlo Park and DAG Ventures of Palo Alto also participated in the round.

Accel partner Jim Breyer is joining Booyah's board. "Booyah is at the epicenter of the fastest growing markets today— mobile, social, and interactive gaming," he said.

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Healthcare Trust of America Inc., a Scottsdale-based real estate investment trust, has purchased the Federal North medical office building in Pittsburgh for about $40.5 million.

Federal North is a four-level medical office building comprising nearly 192,000 square feet. Included in the deal is a separate four-level, 525-space parking garage. The Class A building, located near a 724-bed hospital, is 99 percent occupied.

“This acquisition is consistent with our long-term strategy of acquiring high-quality medical office buildings in key markets which are affiliated with strong health care systems,” Mark Engstrom, HTA’s executive vice president of acquisitions, said in a prepared statement bad credit pay day loans.

Engstrom added that Federal North is the REIT’s 10th acquisition in 2010.

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