US – Thursday, March 11
National
Bank your friend? Don’t fool yourself
Is your bank acting like your new best friend? Calling and writing about how they need to protect you — for a fee — in case you overdraw your account? Don’t buy it.
 
International
Canadian pols eat seal to make point to Europe
Canadian parliamentarians dug into a meal of seal meat yesterday to defy both animal right activists and the European Union, which has banned imports of seal products.
 
The Word
A little mother and daughter quality time
When your mom is the never-aging Demi Moore, you probably have to spice up your mother/daughter relationship with a little more than just having brunch together.
 
Movies
An ‘Ugly’ farewell and a role in a ‘Wedding’
It’s time to say so long to “Ugly Betty” as America Ferrera returns to the big screen this month with “Our Family Wedding,” a culture-clash comedy about a Mexican-American law student (Ferrera) who brings her African-American fiancé (Lance Gross) home to meet her caught-off-guard family. It’s the actress’ first film since the announcement that her 4-year-old ABC comedy won’t be returning in the fall.
 
Business
‘Free’ ad leads to fraud suit
NEW YORK. A Wisconsin college student is suing credit firm Experian — the brains behind the ubiquitous FreeCreditReport.com jingles — for fraudulent advertising after she inadvertently signed up for a monthly $14.95 monitoring service.
 
My Travel
Not your average island getaway
We promise not to get that annoying Beach Boys song stuck in your head — impossible now that we’ve  brought it up. Aruba, heading up that list of tropical islands sung about in “Kokomo,” is often incorrectly lumped with the Caribbean, when in fact, it couldn’t be more unique from the rest.
Like the others, Aruba has the gorgeous beaches and stunning coral reefs. What it doesn’t have are hurricane seasons. Tourists never have to worry about planning a vacation to the island that lands in the middle of hurricanes Brad, Manny or Zach. Instead you’ll be met with cacti and warm, dry breezes.
 
Updated 21:23, December the 4th, 2008
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Bernanke Says U.S. Must Step Up Foreclosure Prevention Efforts


NEW YORK.  Federal Reserve Chairman Ben S. Bernanke Thursday urged using more taxpayer funds for new efforts to prevent home foreclosures, saying the private sector is incapable of coping with the crisis on its own.

The Fed chief outlined four possible options, including buying delinquent mortgages and providing bigger incentives for refinancing loans. He called for addressing the “apparent market failure” where lenders aren’t modifying mortgages even in cases where it’s in their own economic interest to do so.

Each option would require “some commitment of public funds,” Bernanke said, underscoring his position that the central bank alone can’t revive the economy through its interest-rate cuts and emergency lending programs. The Republican’s stance may also put him in line with President-elect Barack Obama, who said Wednesday that “we’ve got to start helping homeowners in a serious way.”

“More needs to be done,” Bernanke said in a speech to a Fed research conference on housing and mortgage markets in Washington. “Policy initiatives to reduce the number of preventable foreclosures should be high on the agenda.”

The government could buy “delinquent or at-risk mortgages in bulk,” then refinance them through the federal Hope for Homeowners program, Bernanke said. Congress could also help reduce loan rates and lender insurance premiums, he said.

Estimates show as many as 20 percent of borrowers may now be “under water,” where their mortgage is bigger than the price of their home, Bernanke said.

“Despite good-faith efforts by both the private and public sectors, the foreclosure rate remains too high, with adverse consequences for both those directly involved and for the broader economy,” he said.

Some foreclosures are happening “even in cases in which the narrow economic interests of the lender would appear to be better served through modification of the mortgage,” Bernanke said. That is partly the result of packaging loans as securities for sale to investors, where there’s the risk of lawsuits and a lack of “clear guidance,” he said.

Bernanke said a mortgage-guarantee proposal by the Federal Deposit Insurance Corp. has “strengths,” including that the government is involved only if a borrower defaults again. FDIC Chairman Sheila Bair is pressing the Treasury Department to use authority in the $700 billion financial-rescue package to implement the program to spur mortgage modifications.

Another option is to have the government share costs when a loan servicer reduces a borrower’s monthly payment, Bernanke said. While this would put a “greater operational burden on the government” than the FDIC plan, it would “build on, rather than crowd out, private-sector initiatives,” he said.

The Hope for Homeowners program, run by the Federal Housing Administration, has signed up few lenders since it started in October because banks must write off a large portion of the loan and pay high fees. The Fed sits on a board that oversees the program.

Bernanke ’s proposed changes would go beyond those announced last month by Housing and Urban Development Secretary Steve Preston, who oversees the FHA. The agency will lower the amount of the loan a lender must forgive, allow banks to extend mortgage terms to 40 years from 30 years and give subordinate holders immediate payment for releasing their liens.

Congress could make the program more attractive by reducing the up-front insurance premium paid by the lender, which is now 3 percent of principal, and the borrower’s 1.5 percent annual premium, Bernanke said.

Lawmakers should also consider reducing borrowers’ interest rate, which may be near a “quite high” 8 percent, he said. That could be accomplished by having the Treasury buy Ginnie Mae securities, or having Congress directly subsidize the rate, Bernanke said.

Bloomberg