EXPRESS-NEWS: Henry Cisneros on the hot seat
When Henry Cisneros joined the board of directors of Countrywide Financial Corp. in 2001, the real estate industry was poised for a spectacular ride... Cisneros' financial fortunes would soar, too. He was granted — and sold — more than $5 million in company stock as prices climbed from around $10 per share in 2001 to more than $40 per share in late 2006 and early 2007... Yet Countrywide's business began unraveling during the watch of Cisneros and his fellow directors. While the company's executives are considered primarily responsible, the case of Countrywide illustrates how quickly a director can find himself accused of having divided loyalties and poorly representing shareholders' interests...  He resigned from the board in October,... just days before Countrywide reported a $1.2 billion quarterly loss. Talk Back: How much do you think Henry Cisneros is responsible for the plight of Countrywide Financial, its shareholders and its customers?  Plus Related articles...HUD's Broken System

Home Builders Halt Campaign Funds After Setback
The National Association of Home Builders, one of the top 10 corporate donors to politicians, has stopped contributing to congressional candidates after it failed to get what it wanted in recent anti-recession legislation. "Lobbies like to pretend that congressional action and their donations aren't tied, " said Melanie Sloan of Citizens for Responsibility and Ethics in Washington. "But the home builders just confirmed that they are." Ethics lawyers routinely warn interest groups to avoid saying or implying that the money they provide to candidates compensates them for taking a position on a particular piece of legislation. Such quid pro quos could be considered illegal gratuities or bribes.  See Reader Comments...

 Homebuilder Freeze all PAC (Money) to Elected Officials
Should builders get money from the government for the housing crisis? See Poll results after 24 hours
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Credit forcing home builders into bankruptcy
Home builders in metro Atlanta are in trouble, not just because they're not selling enough houses, but because they are having a hard time getting credit from their banks. "We are seeing large numbers of builders that are not able to get extensions of credit to either keep building or hold their inventories," said James L. Paul, business litigation and Chapter 11 reorganization attorney with Chamberlain, Hrdlicka, White, Williams & Martin in Atlanta. "The banks are not able to give extensions to enable the builders to sell off their nventories." Prior real estate busts in Atlanta certainly involved overbuilding and credit restrictions, factors in today's downturn, he said. But the prior downturns with tightening credit really only affected unqualified borrowers. This time, it's different. Read more...

FBI investigating 14 companies for mortgage fraud
Complaints about potential mortgage fraud are up during the subprime mortgage crisis, and the FBI has opened criminal investigations of 14 companies related to subprime mortgage loans, the agency said Tuesday. Neil Power, chief of the FBI economic crimes unit, attributed the increase "to good old-fashioned greed." "On insider trading, we're looking in some cases at whether executives were aware that the value of their holdings would be going down and the executives traded on that information," said Power.

Steve Kroft Reports How The Mortgage Meltdown Is Shaking Markets Worldwide
It was another nervous week for the world's financial markets and for Wall Street. In the last six months, Americans have seen their investments shrink, their property values plummet, and the country edge closer towards a recession. At the heart of the problem is something called the subprime mortgage crisis, which began last summer and continues to ricochet through the economy...Developers started turning asparagus fields into subdivisions, and lenders handed out free money to anyone who wanted to buy. "What do you mean by free money?" Kroft asks Jim Grant, the editor of "Grant's Interest Rate Observer" and one the country's foremost experts on credit markets. "I mean free money. I mean you had to apply not to get a loan, almost. Sometimes you have to apply to get a loan, you almost had to apply not to get one," Grant says.

Congress reluctant to act on mortgage lending issues
As 2007 came to a close, Congress had done a lot of talking about cracking down on unfair and deceptive mortgage lending practices, but didn't deliver on any major legislation. Although there's some consensus that tighter regulations or new laws governing lenders are needed, some lawmakers have been reluctant to impose restrictions that might worsen the credit crunch and the housing downturn. In the meantime, the Federal Reserve has proposed strengthening its implementation of the Truth in Lending Act, through new regulations that would require subprime lenders to verify a borrower's ability to repay a loan after a payment reset; document income and assets; and establish escrow accounts for taxes and insurance for a minimum of one year.

Mortgage-Relief Plan Divides Neighbors
The state's highest number of foreclosures is in the Inland Empire, a region of 4.1 million people. The area might seem ripe for the mortgage-rescue plan, which would freeze interest rates for certain borrowers who have kept current on their loan payments but can't afford scheduled interest-rate increases over the next two years. The Inland Empire was a builder's delight in recent years as middle-class families increasingly were priced out of Los Angeles and Orange County. Giants such as Lennar Corp., KB Home and Beazer Homes USA Inc. uprooted citrus groves and paved over dairy farms to blanket the area with tract housing and upscale developments.

The Calabasas lender says California and Illinois have issued subpoenas
The nation's No. 1 mortgage lender, Countrywide Financial Corp., is under investigation by California Atty. Gen. Jerry Brown and the attorney general's office in Illinois, the Calabasas company said Thursday. The investigation in Illinois, which was first reported in the New York Times, grew out of a probe into broker One Source Mortgage, which the state has charged with luring borrowers into loans they couldn't afford.

Senate Democrats propose new restrictions on mortgage lenders
Senate Democrats have rolled out a bill that, like legislation passed by the House last month, is aimed at preventing mortgage brokers from steering borrowers into higher-cost loans in order to collect bigger fees, and bars prepayment penalties on subprime and high-cost loans.The Homeownership Preservation and Protection Act of 2007, introduced Wednesday by Sen. Chris Dodd, D-Conn., would require loan servicers to implement loss mitigation strategies before initiating foreclosure proceedings against borrowers.