E-News from the Office of Senator Van de Putte
We are facing difficult times--the number of home foreclosures and unemployment rates are steadily rising across the country and many of our major financial institutions are in trouble. We are all concerned and troubled, and as such, I am writing to provide to you with information on our nation's economy.
Information from the Attorney General on Countrywide Settlement
Texas Attorney General Greg Abbott, along with six other state attorneys' general, reached a nearly $8 billion agreement with Countrywide. The settlement resolves states’ investigation into Countrywide’s lending practices; Bank of America, which recently acquired Countrywide, agreed to the settlement.
Texans currently in default or likely to default on sub-prime mortgages issued by Countrywide may now be eligible to participate in an extensive loan modification program. Through this program, eligible borrowers will be able to modify the terms of their loans to make monthly payments more affordable and allow more borrowers to stay in their homes.
Modified loan terms will vary according to each borrower’s individual circumstances. Countrywide customers may benefit from an automatic freeze or reduction in interest rates, an extension of loan terms, conversion to fixed term loans or principal reduction. Eligible borrowers who participate will not be charged late fees, loan modification fees, foreclosure fees or pre-payment penalties. Bank of America estimates up to 30,000 Texas homeowners will qualify for the loan modification program.
Bank of America will spend $150 million nationwide to assist homeowners who have already lost their homes. The lending giant will spend up to $70 million to homeowners who, despite the loan modification program, are ultimately unable to keep their homes. Bank of America also agreed to suspend the foreclosure process for eligible homeowners who are in default but wish to stay in their homes.
Countrywide borrowers who have been foreclosed upon or who are unable to afford their homes, even under a modified loan arrangement, will be offered soft landing payments to ease re-location to another home.
Texans who may be eligible for the program should visit www.countrywide.com or call (800) 669-0102 for more information.
Consumers who believe they have been targeted by a mortgage-related scam should contact the Office of the Attorney General at (800) 252-8011.
Information from National Association of Insurance Commissioners (NAIC) on AIG
The NAIC is an organization comprised of United States chief insurance regulators who serve as a resource concerning the current situation with the American International Group (AIG).
AIG is a financial holding company which owns 71 U.S. based insurance entities and 176 other financial service companies throughout the world. The issues facing AIG are centered around its financial holding company that is subject to federal regulatory oversight by the U.S. Office of Thrift Supervision.
The AIG financial holding company took on more risk than it could handle and lost money on investments when the U.S. housing markets experienced a downturn. State regulatory oversight of AIG's state-regulated insurance entities is not the problem. The operating insurance subsidiaries of AIG, which write the policies, are financially sound and are fully able to pay claims.
State insurance regulators are working to protect America's insurance consumers and have been involved in the process to address the issues facing AIG. They are collaborating with the new management, to safeguard the assets of insurers to ensure they are available for policyholders and claimants. They are also monitoring the financial condition of the AIG-affiliated insurance companies and reviewing activities at its parent company that impacts insurance company assets. If any insurance company is at significant risk, state regulators could take over management of the insurer, and if it appears that the insurer is not going to be able to fulfill its promise to policyholders, state guaranty fund can step in to cover claims up to certain levels.
The intent is not to federalize insurance regulation, but to make targeted areas of the financial sector under federal regulation more transparent and accountable. Transparency keeps all stakeholders informed to make the best possible decisions about financial products, while keeping everyone honest and allowing all parties to make a reasonable profit.
State regulators and the NAIC welcome the opportunity to participate in efforts to enhance the stability of the U.S. financial market, minimize disruption to the economy and ensure every Americans' financial future is protected.
Our Local Economy
Although times are tough for everyone, Texas is still doing better than the rest of nation, even after experiencing the devastation of Hurricane Ike.
In 2007, Texas created jobs almost twice as quickly as the national rate, making this Texas' fourth consecutive year of job growth. In fact, Texas added more jobs than any other state in the 2007 fiscal year, with a total of approximately 229,000 new (non-farm) jobs, according to the Texas Annual Cash Report.
San Antonio, remains one of the countries’ fastest growing cities, as the population in Bexar County has risen to over 1.6 million residents. We continue to foster new business growth and international trade at Port Authority and Brooks City Base. Our information technology sector has grown through the newly opened Microsoft Data Center and Lowe's Data Center, other future data center projects include Christus Health, the National Security Agency and Stream Realty.
Although we have seen the real estate market steadily decline nationally, the San Antonio market remains steady, our average price of single family dwellings continues to rise. Regulations for home equity borrowing and lending resulted in Texas having among the lowest levels of mortgage defaults.
My desire is to keep San Antonio families secure. I will work diligently this session on legislation to fight predatory financial practices and ensure the strength of our local economy.
HOW TO CONTACT SENATOR VAN DE PUTTE
700 N. St. Mary's St. #1725
San Antonio, Texas 78205
(210) 733-6605 - fax