At the end of 2006, 65.7% of the identified official foreign exchange reserves in the world were held in United States dollars and 25.2% in euros.
Monetary Authorities with the largest foreign reserves in 2007.
Rank Country/Monetary Authority billion USD (end of month) change in year 2007
1 People's Republic of China $1528 (December) +42.9%
2 Japan $996 (January) +10.6%
— Eurozone $511 (December) +16.6%
3 Russia $485 (February 1) +56.8%
4 India $293 (February 1)
5 Republic of China (Taiwan) $273 (January) +2.7%
6 South Korea $262 (January) +9%
7 Brazil $189 (February 12) 3 +105.9%
8 Singapore $168 (January) +24.6%
9 Hong Kong $160 (January) +14.6%
10 Germany $136 (December) +20.3%
(http://en.wikipedia.org/)
12.2.08
Paulson launches subprime mortgage lifeline
By Jeremy Grant in Washington
Published: February 12 2008 20:20 Last updated: February 12 2008 20:20
Saying “the worst is just beginning” for a wave of subprime mortgage resets in the US, Treasury secretary Henry Paulson on Tuesday unveiled an initiative with six private sector banks to delay home foreclosures.
The initiative, called Project Lifeline, targets homeowners who are 90 days or more behind on their mortgage payments and offers them a 30-day “pause” in the foreclosure process.
The announcement comes four months after the administration established the Hope Now alliance, its first response to stemming the rate of subprime mortgage resets faced by millions of distressed homeowners.
A report by a group of state attorneys-general last week concluded that two-thirds of borrowers who were behind on payments in October received no workout help from the industry. Robert Steel, undersecretary for domestic finance, recently told a Senate committee hearing that progress on Hope Now had been “inadequate” until recently.
A separate report from Hope Now last week said 68 per cent of delinquent borrowers were helped across the second half of last year.
Christopher Dodd, senate banking committee chairman, last month proposed the establishment of a federal entity that would buy outstanding, near-delinquent mortgages at steep discounts and transfer the discount to homeowners through new, lower-balance loans.
Project Lifeline involves Bank of America, JP Morgan Chase, Citigroup, Countrywide, Washington Mutual and Wells Fargo. It includes borrowers with better credit histories than those typically locked into subprime mortgages – a sign the administration is concerned about resets affecting “alt-A” loans, which do not require full documentation, as well.
Mr Paulson said Project Lifeline was aimed at homeowners “who face a real risk of losing their home, but have not yet addressed the problem”. It was “just one of the many steps” that the administration had planned since Hope Now.
But Mr Dodd said: “This plan, while a step in the right direction, will not stem the tide of the millions of foreclosures we are facing in the coming months.”
Mortgage servicers have been reluctant to take advantage of Hope Now because they fear liability exposure by modifying loan conditions.
John Taylor, president of the National Community Re-investment Coalition, a non-profit trade association, said a related issue was likely to affect Project Lifeline.
“The majority of the problem loans we are talking about . . . were not originated by these [six] banks. They will need to get permission from their shareholders to modify those loans. So far that’s proved difficult.”
Published: February 12 2008 20:20 Last updated: February 12 2008 20:20
Saying “the worst is just beginning” for a wave of subprime mortgage resets in the US, Treasury secretary Henry Paulson on Tuesday unveiled an initiative with six private sector banks to delay home foreclosures.
The initiative, called Project Lifeline, targets homeowners who are 90 days or more behind on their mortgage payments and offers them a 30-day “pause” in the foreclosure process.
The announcement comes four months after the administration established the Hope Now alliance, its first response to stemming the rate of subprime mortgage resets faced by millions of distressed homeowners.
A report by a group of state attorneys-general last week concluded that two-thirds of borrowers who were behind on payments in October received no workout help from the industry. Robert Steel, undersecretary for domestic finance, recently told a Senate committee hearing that progress on Hope Now had been “inadequate” until recently.
A separate report from Hope Now last week said 68 per cent of delinquent borrowers were helped across the second half of last year.
Christopher Dodd, senate banking committee chairman, last month proposed the establishment of a federal entity that would buy outstanding, near-delinquent mortgages at steep discounts and transfer the discount to homeowners through new, lower-balance loans.
Project Lifeline involves Bank of America, JP Morgan Chase, Citigroup, Countrywide, Washington Mutual and Wells Fargo. It includes borrowers with better credit histories than those typically locked into subprime mortgages – a sign the administration is concerned about resets affecting “alt-A” loans, which do not require full documentation, as well.
Mr Paulson said Project Lifeline was aimed at homeowners “who face a real risk of losing their home, but have not yet addressed the problem”. It was “just one of the many steps” that the administration had planned since Hope Now.
But Mr Dodd said: “This plan, while a step in the right direction, will not stem the tide of the millions of foreclosures we are facing in the coming months.”
Mortgage servicers have been reluctant to take advantage of Hope Now because they fear liability exposure by modifying loan conditions.
John Taylor, president of the National Community Re-investment Coalition, a non-profit trade association, said a related issue was likely to affect Project Lifeline.
“The majority of the problem loans we are talking about . . . were not originated by these [six] banks. They will need to get permission from their shareholders to modify those loans. So far that’s proved difficult.”
Copyright The Financial Times Limited 2008
6.2.08
How Oxford Funding would like to make money - (FYI ONLY)
The Math Behind This Genius
Assume a $220,000 home, where buyer puts 10% down and has a $200,000, 30-year fixed rate mortgage at 7%. The LENDER is about to default on its credit lines from liquidity issues and is desperate to off load its mortgage portfolios and raise cash. Nobody will touch its defaulted loans, so to stave off bankruptcy, it begins liquidating PERFORMING LOANS.
Oxford Funding steps in with an offer of say, 70% and a quick closing. Lender is saved from bankruptcy, greatly relieved, and readily agrees to the fast, discounted closing. Oxford invests $140,000 for the $200,000 mortgage. Oxford collects 7% of $200,000 in interest ($14,000/year) or 10% return on ITS invested capital while it holds the mortgage. Sometime down the road when the market returns to normal, Oxford resells the loan for $200,000 face value, pocketing an additional $60,000 in capital gains!!! Just add ZEROS to the number for a mortgage loan “portfolio” in the millions or billions…
As more mortgage lenders are taken to the cleaners, Oxford’s takeover activity will keep returns strong as it takes advantage of historic opportunities to capitalize on the largest tumble in the U.S. Mortgage Market since the late 1980’s. Sometimes, portfolios are classified as “sub-performing”, as the borrower has been making partial payments, interest only or has fallen behind in payments. These loans can typically be purchased at even greater discounts, and Oxford Funding has the management talent and ability to restructure the loans; forgiving portions of past interest or late fees, tailoring solutions to help the borrower get ahead of the curve, ultimately bringing them current and performing. Oxford can then either resell the loans at face value to traditional lenders, or keep the assets for larger profits over the term of the loan.
“The frenzy in the markets is exciting because "dislocations" can occur in pricing”. – Warren Buffett
Some experts have compared the Oxford business model to that of buying and reselling foreclosure properties, only better. Industry Pioneer J.T. Cloud says:
“Why buy a foreclosed property on the court house steps at a 15-20% discount to true value, and inherit the problems associated with real estate management, when you can buy the LOAN on that same property, directly from the lender who is desperate to off load the paper, at a discount of 40-60% or more!”
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