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How Rating Firms' Calls Fueled Subprime Mess

In 2000, Standard & Poor’s made a decision about an arcane corner of the mortgage market. It said a type of mortgage that involves a “piggyback,” where borrowers simultaneously take out a second loan for the down payment, was no more likely to default than a standard mortgage. While its pronouncement went unnoticed outside the […]

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Valuations In Spotlight As Funds Halt Redemptions

Fund managers and banks are under scrutiny for their methods in valuing illiquid securities, after some funds admitted they’re having trouble putting a price on complex debt instruments backed by residential mortgages and corporate loans. Units of French bank BNP Paribas SA (BNPQY) and insurer AXA SA (AXA) have suspended redemptions on some of their […]

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Mortgage delinquencies spreading: AIG

Residential mortgage delinquencies and defaults are becoming more common among borrowers in the category just above subprime, American International Group (NYSE: AIG) said on Thursday. In a presentation on its subprime exposure, AIG, the world’s largest insurer and one of the biggest mortgage lenders, said total delinquencies in its $25.9 billion real estate portfolio were […]

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Bear Stearns Caymans Filing May Hurt Funds' Creditors

Bear Stearns Cos.’ decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York may limit creditors’ and investors’ ability to get their money back. While most of their assets are in New York, the funds filed for bankruptcy protection July 31 in a court in the Caymans, where they are […]

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Bear Stearns overhauls top management after hedge fund woes

Wall Street investment bank and brokerage Bear Stearns overhauled its top management ranks at the weekend, but its shares continued to fall Monday amid concerns about its exposure to mortgage-related securities. The bank’s president and co-chief operating office Warren Spector announced his resignation from Bear Stearns on Sunday as the bank said it had appointed […]

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