| State reaches $105,000 settlement with mortgage company
The Kentucky Office of Financial Institutions has reached a $105,000 settlement with Nationstar Mortgage LLC. Nationstar, formerly known as Centex Home Equity Co. LLC, does not admit liability, according to a news release. The settlement arose from investigations of the company's offices in Louisville and in Lewisville, Texas, in 2006. OFI concluded that Nationstar has employed "numerous unregistered loan officers," the release said. The $105,000 settlement will go toward the Nationwide Mortgage Licensing System, a collaborative effort among state regulators to bring greater efficiency and accountability to the mortgage industry by creating a standardized system for licensing. As part of the agreement, OFI also has been directed to adjust loans where violations might have occurred in regard to the refinancing terms.
Ouch! That PetSmarts!
You know how they say that in comedy "timing is everything"? Well, it seems the same thing's true for tragedy. Yesterday, as stock markets around the world bled red, one sector above all others outperformed: "specialty retailers." Lauded in a weekend issue of Barron's as ripe for private equity buyouts, it seemed any company that could conceivably call itself a "specialty retailer" saw its stock surge on Tuesday. Home Depot (NYSE: HD) rose 7.2%. Bed, Bath & Beyond (Nasdaq: BBBY) did it one better at 8.4%. Lowe's (NYSE: LOW) leapt past 10.3%. And American Eagle (NYSE: AEO) soared past it at 11%. The buyout speculation was so widespread that even niche retailer, Motley Fool Stock Advisor recommendation, and pet supplies specialist PetSmart (Nasdaq: PETM) -- what's more special than kittens? -- partook of the bounty, running with the bulls for a 7% gain.
Optimus sub-prime
Just before the Bush Administration announced its new mortgage-market plan, we got a visit from some activists who follow the issue closely and are proposing their own reform proposals. Paul Leonard, director of the Center for Responsible Lending, Kevin Stein, associate director of California Reinvestment Coalition, and Norma Paz Garcia, senior attorney at the west coast office of Consumers Union, are floating a range of proposals aimed at providing relief to borrowers on the verge of default.
Prime people in sub-prime loans
Kevin Stein: Almost everybody agrees that the lending that has occurred over the last few years has been bad. However we would define it. I would label it predatory. People would call it loose underwriting, lax underwriting. The regulators recognized this, the industry recognizes this.
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