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Greece taps public sector cash to help cover March needs


Greece taps public sector cash to help cover March needs
Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.Shut out of debt markets and with aid from lenders frozen, Athens is in danger of running out of cash in the coming weeks as it faces a 1.5 billion euro loan repayment to the International Monetary Fund this month.The government has sought to calm fears and says it will be able to make the IMF payment and others, but not said how.At least part of the states cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the countrys debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters.However, one government official said they could not be used to repay the IMF unless Athens was able to repay the state entities the cash it borrowed from them.Debt officials sought to play the repos as advantageous for both sides, arguing that the funds get a better return on their cash than what is available in the interbank market.”It is not something new, its a tactic that started more than a year ago and is a win-win solution. Its a proposal, we are not twisting anyones arm,” one official said.In such repo transactions, a pension fund or government entity parks cash it does not immediately need at an account at the Bank of Greece, which becomes the counterparty in the deal with the debt agency.The money is lent to the debt agency for one to 15 days against collateral – mostly Greek treasury paper held in its portfolio – and is paid back with interest at expiry.The lender can always opt to roll over the repurchase agreement and continue to earn a higher return than what is available in the interbank market.One source familiar with the matter has previously said Athens could raise up to 3 billion euros through such repos, but that it was not clear how much of that had already been used up by the government.”There is a sum that has already been raised this way,” the debt official said without disclosing specific numbers.Athens – which has monthly needs of about 4.5 billion euros including a wage and pension bill of 1.5 billion euros – is running out of options to fund itself despite striking a deal with the euro zone to extend its bailout by four months.Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner, though the government is trying to assure creditors it will not default.”We are confident that the repayments will be made in full, particularly to the IMF, and there will be liquidity to get us through the end of the four-month period,” Finance Minister Yanis Varoufakis said during a late-night talk show on Greek TV on Monday. “March is sorted.” [Reuters]

Supporters push for cap on payday loan businesses


(Source: WBRC video)BIRMINGHAM, AL (WBRC) –

Pay day loan businesses promise to help in hard times and give you cash when you need it most.

But for a lot of people payday loan and cash advance type establishments are doing more harm than good.

“We had a member in our church who had her car repossessed in the middle of the night. Got up the next morning trying to go to work and her car wasn’t there,” said Rev. R.G. Lyons with Church Without Walls.

A number of Lyons’ congregation members have fallen victim to these businesses. In fact, some checks were even stolen from the church and cashed at a cash advance business. Calls from the business became so constant they had to disconnect the lines.

“It’s really frustrating. They’re basically like school yard bullies. They prey on the weak and they try to intimidate people,” said Lyons.

Dozens of people rallied in front of YWCA in Downtown Birmingham on Monday to gain momentum on a movement to cap the interest rate for loan businesses.

Shay Farley is the Legal Director for a group called Alabama Appleseed. She has been pushing for a cap fair trading for eight years.

“We’ve had legislation for three years and so far we haven’t really gotten a lot of attention,” said Farley. “A lot of people don’t know that these title loans in Alabama are 30-day loans and they’re 300% interest. A 14-day loan where you can postdate a check in 456% and we’re tired of it.”

Farley said this isn’t a bipartisan issue nor is about a person’s ideologies or political beliefs. She said this is a moral issue and wants to see a stop to those who prey on the poor.

Senator Jabo Wagner was in Birmingham Monday. He said payday loan type businesses have and continue to have a very strong lobbying force to protect their interests.

That being said, Wagner said there is more movement this year in the legislature to lower the interest rate.

Copyright 2015 WBRC. All rights reserved.


Police Looking for Suspect in Cash Store Armed Robbery



Corpus Christi police are on the lookout for a man that allegedly robbed a cash loan business on South Staples Street Monday afternoon.

The robbery took place at around 3 p.m. at the cash store located in the 4200 block of South Staples Street. The suspect told employees that he had a gun, but never displayed the weapon. He got away with an undetermined amount of cash.

The suspect is described as a Hispanic male in his mid-30s. If you have any information about this crime, please call Crime Stoppers at 361-888-8477.


Low down payment mortgages back for buyers

Potential homebuyers who don’t have a lot of cash to put down now have a cheaper way to get a loan.

Mortgage giants Fannie Mae and Freddie Mac announced guidelines Monday for loans with down payments as low as 3 percent under a new program largely aimed at first-time homebuyers.

“These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices,” said Federal Housing Finance Agency Director Mel Watt in a release.

Read More The top 10 housing markets for growth in 2015

The loan must be fixed rate, and the home must be a borrower’s primary residence, so this would not apply to investors, according to FHFA officials on a conference call with reporters Monday morning. At Fannie Mae, at least one of the borrowers on the loan must be a first-time homebuyer, defined as not having owned a home in the past three years. Freddie Mac is allowing the low down payment loan for any borrower who meets its underwriting standards.

Full documentation of a borrower’s income and credit history is required, as is mortgage insurance. Freddie Mac will require credit counseling for its borrowers, while Fannie Mae will in certain cases.

Fannie Mae has a 3 percent down payment product already through state housing finance agencies, but this loan may go through any lender interested in the program. At a conference in November, Bank of America CEO Brian Moynihan said his bank would not participate in a low down payment program and reportedly suggested that if borrowers didn’t have 10 percent to put down, they should probably rent. That was before these details were announced.

“[Mr. Moynihan] made those comments several weeks ago as a broad characterization,” said Bank of America spokesman Terry Francisco on Monday. “We will evaluate this program.”

Read More Self-employed? Good luck getting a mortgage

Fannie Mae, which is significantly larger than Freddie Mac, will also offer a cash-out refinance through the program, but only on existing Fannie Mae loans, and the amount of the cash out is limited to the lesser of 2 percent of the loan or $2,000. It is designed to help cover closing costs only. Freddie Mac is offering a no cash-out refinance.

Fannie Mae’s minimum FICO credit score cutoff is 620, while Freddie Mac’s is 660, but both are subject to so-called, compensating factors, so if a borrower has a credit score on the low side, he or she may need to show more assets to mitigate the added risk.

The move to offer these low down payment loans is clearly in response to an industry cry that credit is too tight and stifling demand from first-time homebuyers. These buyers, usually up to 40 percent of the homebuying market, have been stuck at less than a third of today’s market. Income growth has not been keeping pace with rising home prices, and as rents continue to rise, potential buyers are having a much tougher time saving for a large down payment.

Read More Unsteady incomes keep millions behind on bills

Fannie Mae will allow these loans starting Dec. 13, while Freddie Mac will begin underwriting for loans with settlement dates beginning March 23, 2015.

FinanceLoansFreddie MacFannie Mae […]

Banks offer home loan enticements


Banks offer home loan enticements as property market hots up

BusinessDate September 22, 2014 – 12:15AM (0) Read later

National Australia Bank will on Monday start giving borrowers $1000 in an unapologetic marketing tactic.

Banks have started to throw cash at customers again in an effort to win business as spring fever hits the property market and house prices soar.

National Australia Bank will on Monday start giving borrowers $1000 in an unapologetic marketing tactic aimed at increasing its share of Australia’s $1.3 trillion mortgage market without cutting interest rates, which are at historic lows.

It comes as Treasurer Joe Hockey said he was “hesitant” for the government to take action to rein in spiralling property prices, with the median Australian home price surging 11 per cent in the past year. Instead, he said it was up to the Reserve Bank and bank regulator, the Australian Prudential Regulatory Authority, to adopt limits on mortgage lending to cool an overheating property market.

“I am naturally hesitant to have government in any way interfere in the market. But, of course, we are in some challenging times when it comes to monetary policy,” Mr Hockey said. “The Reserve Bank needs to be mindful of some of the domestic challenges, and the quite limited massive growth in real estate prices in parts of Australia. I say that because it’s primarily in pockets of Sydney, pockets of Melbourne and, to a lesser degree, in Brisbane.”



Seminar pulls veil off payday loan biz | Amarillo Globe-News

Payday and auto title loans are big business in Amarillo, and city leaders will hear from two experts and the public on Monday about possibly regulating the lenders.

Data from the Texas Office of Consumer Credit Commissioner shows there were 9,654 payday loans with single payments due made in Amarillo during 2013 and twice that many refinanced. Those transactions totaled $13 million and generated $3 million in fees.

About $6.8 million in new and refinanced auto title loans generated $1.9 million in fees in 2013. There were 2,878 new loans and 3,571 refinances.

The statistics are for the Amarillo Metropolitan Statistical Area, which includes Armstrong and Carson counties in addition to Potter and Randall counties.

“The issue has become more apparent to cities as more locations come in and there’s an increase in negative impact,” said Brett Merfish, one of the speakers at the Monday event and staff attorney for Texas Appleseed, a public interest law center.

“In Amarillo in 2013, there were almost 400 cars repossessed,” she said.

“(Lenders) cluster in low-income zip codes. And after (borrowers) take out a loan, they’re in worse financial shape.”

Supporters of the industry say there are good reasons they’re in less affluent neighborhoods.

They take more risks for higher rewards through inflated interest rates and provide credit to people standard institutions like banks won’t consider, payday lenders argue.

The event will start at 5:30 p.m. in the Heritage Ballroom of the Amarillo Civic Center, 401 S. Buchanan St.

Also attending and sharing their thoughts on the topic will be City Councilman Jerry Allen of Dallas, where the city regulates the businesses, and several local community groups.

“This will be your opportunity to express yourself, so pass the word,” Amarillo City Councilwoman Lilia Escajeda said of the meeting on loans that can have interest rates of more than 500 percent.

The fees aren’t light, either.

“They cost twice as much in Texas,” Merfish said. “For a $500 loan for two weeks, the fee in Florida is $55. In Texas it’s $110.”

There are ordinances in 18 Texas cities based on one put together by the Texas Municipal League to regulate the lenders.

Some of the provisions include requiring the business to register with the city, limiting the number of times a loan can be refinanced, requiring a short term for repayment with payments reducing principal by a minimum of 25 percent per payment and loans based on the borrower’s ability to repay.

One such payday loan business recently lost an enforcement battle over “unethical” and “abusive” behavior allegations.

On July 10, the Consumer Financial Protection Bureau filed a consent order in which Ace Cash Express agreed to pay a $5 million fine, $5 million in restitution and educate its workers on how to perform their jobs within the law, such as not calling past-due borrowers at work or calling third parties and telling them about the loans.

There are two Ace Cash Express locations in Amarillo.


Suit: Companies Duped Victims Struggling With Student Loan Debt


Two companies that promised to help Americans struggling with student loan debt instead allegedly pocketed their money and did little or nothing to help them, in a scheme that one state regulator warned is an emerging area of fraud nationwide.

Illinois Attorney General Lisa Madigan filed lawsuits Monday against the companies, First American Tax Defense LLC of Chicago and Broadsword Student Advantage LLC of Frisco, Texas, alleging they charged large upfront fees for bogus services or for government programs that consumers could have obtained for free. The suits are the first of their kind aimed at an industry that has drawn scrutiny from federal and state authorities.

The lawsuits contend that the companies preyed upon people who were desperate to lighten their student loan burdens. The companies allegedly charged consumers illegal upfront fees as high as $1,200 or tacked on monthly recurring fees, claiming they could reduce or eliminate their student loan debt or consolidate their loans. Representatives of the companies could not be reached for comment Monday.

First American touted its expertise in enrolling consumers in a so-called “Obama Forgiveness Program” and charged consumers for borrowers’ assistance applications that are free of charge through the U.S. Department of Education, the suit alleges. Some consumers said First American employees claimed to be affiliated with the federal education department and charged people $700 to $1,199 in illegal upfront fees, according to the suit.

Got a consumer problem? The ABC News Fixer may be able to help. Click here to submit your problem online. Letters are edited for length and clarity.

U.S. student loan debt has hit a whopping $1.2 trillion, making it an area ripe for fraud, consumer advocates say. Many of the 40 million Americans who have student loans have low-paying jobs and are having a tough time making their monthly loan payments.

In some cases, teachers, nurses, police officers, fire fighters or other public service workers were specifically targeted. Broadsword’s radio ads told public sector workers that “your entire student loan can be forgiven – you heard correctly.” Other consumers, the ads said, could “potentially cut their payments in half” or get other relief, the lawsuit alleges. Some consumers were steered into agreements requiring $499.99 upfront and a recurring monthly fee of $49.99 — money that actually went to a related financial planning company, not a debt relief organization, the suit says.

Alleged potential victims included Sharone Brown, a Chicago police officer who contacted Broadsword while struggling to pay her mortgage and student loan debts. Brown said a Broadsword rep told her he could reduce her payments to $49 a month, down from about $450 – but she’d have to pay about $600 in fees.

“He said, ‘We can definitely help you, Mrs. Brown – that’s what this program is all about,’” Brown told ABC News. “He was so excited … he said, ‘You do not know how happy I am that I’m going to be able to help you.’”

Brown, who has a master’s degree in professional counseling, thought it sounded too good to be true, however, so she called the U.S. Department of Education. That’s when she learned that the federal program the rep had pitched wasn’t going to be active until 2017, she said.

Brown said she has since negotiated her payments down to about $308 a month and has made them all on time.

As for the debt relief companies, the police officer who works with at-risk youths said, “I think it’s a shame. … Sometimes people tend to prey on those who are the most vulnerable.”


Canadian payday loan provider seeks bankruptcy protection

TORONTO (Reuters) – Canadian payday loan provider Cash Store Financial Services Inc said on Monday it will seek protection from creditors as it faces liquidity problems resulting from the suspension of its right to offer loans in the province of Ontario.

In February, the Edmonton, Alberta-based company said it was voluntarily delisting its shares from the New York Stock Exchange as its share price had plummeted and it could not meet the exchange’s listing requirements.

Last month, Cash Store said it was in talks with some of its creditors to address near-term liquidity issues that arose after its right to offer loans in Ontario, Canada’s most populous province, was suspended.

The company’s share price has fallen nearly 98 percent over the last two years and its Toronto-listed shares closed Friday at 14 Canadian cents.

Cash Store said on Monday it plans to bring an application in the Ontario Superior Court of Justice to seek protection from creditors under the Canadian Companies’ Creditors Arrangement Act (CCAA).

Its board has also authorized the company to enter into a debtor-in-possession (DIP) financing package enabling it to continue operations during the CCAA proceedings.

“Protection under the CCAA and the financing available under the DIP financing agreement will provide Cash Store Financial with the time and stability to attempt to restructure its affairs,” the company said in a brief statement.

The company, which employs about 2,000 nationwide, said the CCAA protection and the DIP financing agreement are subject to approval by the Ontario Superior Court of Justice.

Cash Store said it will remain open for business during the CCAA proceeding, and daily lending would not be affected.

(Reporting by Euan Rocha; Editing by Peter Galloway)

Finance […]

Deal reports $3.9M in cash for re-election bid

ATLANTA (AP) – Gov. Nathan Deal on Monday reported $3.9 million in cash for his re-election bid, after raising about $84,000 in 11 days since the legislative session ended.

Deal is facing two Republican challengers in the May 20 primary. Democrat Jason Carter, who is running uncontested, was expected to report about $1.6 million in cash for his gubernatorial campaign. Carter, a state senator, outraised Deal over those 11 days and was expected to report about $416,000 in contributions for the period.

Deal campaign spokeswoman Jen Talaber said 100 percent of its contributions came from within Georgia and criticized the Carter campaign for promoting a fundraiser before the session ended. By law, legislators and statewide officials are prohibited from raising money during the session, which began Jan. 13 and ended March 20.

“We followed the rules about not lining up fundraisers during session. Carter for Governor had no such concerns,” Talaber said. “Our cash-on-hand advantage allows the governor to dedicate this month to reviewing and signing bills that will benefit the people of Georgia and keep us the number one place to do business.”

Carter campaign spokesman Bryan Thomas dismissed the criticism, noting the fundraiser was for the Democratic Party of Georgia and that Deal had attended a fundraiser during the session for the Republican Governors Association.

“These numbers show that Jason has all the momentum in this race,” Thomas said. “Our campaign has seen an outpouring of grass-roots support from people who are tired of the governor’s scandals and are looking for real leadership.”

In the Republican primary, Deal faces state schools Superintendent John Barge and former Dalton Mayor David Pennington. Barge, who has spoken about the challenge of persuading donors to give to a candidate challenging the governor, reported just under $18,000 in contributions. That included a $5,800 loan, and Barge had about $16,000 in cash with just six weeks to go before the election.

Pennington reported about $67,500 in contributions, which included a $3,000 loan. He had about $208,000 in cash for the campaign, a small increase over his Jan. 31 report.

In recent days, Deal’s opponents have sought to capitalize on a jury verdict in favor of a former employee of the state ethics commission who claimed retaliation for work investigating the governor’s 2010 personal and campaign finance reports. Deal was not a defendant in the civil lawsuit and has denied any involvement, but his opponents have used to the case to raise questions about his administration. Carter cited the verdict in a recent fundraising email to supporters.

On Monday, Deal announced a proposal to overhaul the ethics commission by allowing each branch of state government to appoint four members. The current five-person commission would grow to 12 under the plan, which would require legislative approval. The Carter campaign said Deal’s proposal was an attempt to blunt the criticism, and Carter planned to detail his proposal Tuesday.


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U.S. Leveraged Loan Issuance Totals $10.7B This Week, $140B YTD


The U.S. leveraged loan market saw $10.7 billion of new issuance over the past week, following up on the $12.8 billion of issuance last week, according to S&P Capital IQ/LCD. The recent activity brings year-to-date leveraged loan issuance to $140 billion, down noticeably from the $176 billion recorded during the same period a year ago.

Even with the relative dip in volume the market remains hot. Indeed, despite caution over the most aggressively structured deals, a number of issuers won tight pricing from investors during the week, with at least seven prices flexes since Monday, according to LCD’s Chris Donnelly. A price flex is when a loan issuer reduces the interest rate or fee offered to potential institutional investors during the syndications process, because of demand for the credit.

In a sign of the continued heated market, over the past few quarters issuer-friendly flexes have dwarfed the amount and number of investor-friendly flexes (where pricing or fees on a loan would be increased, due to lack of demand).

One reason for the flexes. U.S. loan funds just saw their 92nd straight week of net investor cash inflows, totaling a whopping $66.3 billion over that span, according to Lipper, meaning institutional investors are sitting atop a mountain of cash.

Of note this week are two LBO deals, amid the usual roster of opportunistic refinancings.

Private equity concern Berkshire Partners unveiled a $1.6 billion loan backing the buyout of Catalina Marketing, a coupon and consumer communications concern. Like many loans today, the Catalina credit is divided between a covenant-lite tranche (which offers less protection to the lender/investor than do traditionally structured loans), along with a second-lien tranche, which are becoming increasingly popular now, as investors search for yield (and look to put some of that cash to work).

Also this week, private equity shop Hellman & Friedman launched roughly $700 million in loans backing its acquisition of educational software concern Renaissance Learning. As with the Catalina financing, Renaissance features a second-lien tranche.