Merkel offers no aid to Greece; Frank wants banks to drop 'piggyback' mortgages

DEBT CRISIS

Merkel makes no offer to give aid to Greece

German Chancellor Angela Merkel avoided giving debt-plagued Greece a commitment of financial assistance Friday, as Athens was rattled by more strikes and violent protests by unions outraged by harsh economic austerity measures.

Merkel, who met with Greek Prime Minister George Papandreou, said his country had not made any request for financial support. She also called for an end to market speculation that the indebted country will default. Rumors have abounded that the European Union may be preparing some sort of bailout to help Greece cope with its economic woes.

Lawmakers in Greece approved an austerity package worth $6.5 billion but faced fierce union opposition to the plan, with strikes Friday grounding flights for four hours and halting public services.

As Greeks vehemently protested the plan, police used tear gas and batons to disperse rioters outside Parliament. A top trade union leader was roughed up by some protesters, while rioters smashed banks and storefronts. It was the worst violence since Greece's debt crisis escalated late last year. Police said they arrested five people, and seven officers were injured.

-- Associated Press

MORTGAGES

Frank wants banks to drop 'piggybacks'

Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, is in talks with several major lenders in an effort to get them to drop second mortgages, "piggybacks," which allow consumers to make little to no down payment. Piggybacks skyrocketed during the housing boom, but those loans are now worthless in many cases. Still, banks are reluctant to release their claims or reduce the value of those loans on their books, and those lenders can block mortgage modifications.

Frank suggests that investors in second mortgages be promised a payoff if home values recover and the home is eventually sold.

-- Associated Press