Saturday, March 5, 2011;
State attorneys general and federal agencies have given major banks a 27-page proposal to settle part of a massive federal and state investigation in shoddy foreclosure practices.
The document discussed changes to the system used by banks to modify loans for struggling borrowers and press foreclosures when borrowers are unable to pay. The proposed changes include delaying initiation of foreclosure proceedings until a mortgage-modification process is complete, and having one bank employee monitor all the paperwork involved in actions rather than a chain of different employees.
"This sets out how they should service loans and handle foreclosures," said Geoff Greenwood, communicators director for Iowa Attorney General Tom Miller, who's leading the state effort. "Assuming the parties come to some agreement, these would be binding legal requirements."
State attorneys general and the Obama administration are continuing to discuss a fine for the banking industry that could eclipse $20 billion and requirements that banks take more steps to modify mortgages, including for those borrowers who owe more than their homes are worth.
The term sheet was provided to banks by a task force of state attorneys general but carried support of the Justice Department, Housing and Urban Development Department, Consumer Financial Protection Bureau and Federal Trade Commission. Federal and state officials must now meet with banks over the coming weeks to discuss the proposals.
- Zachary GoldfarbAutomakerS
A fire that closed an auto parts plant near Detroit this week is now having ripple effects on five automakers, forcing two of them to close plants or cut production because they've run short of parts.
The impact of the blaze, at a Magna International interior parts plant near Howell, Mich., shows how years of work to make auto plants more efficient can fall apart when something interrupts the flow of parts in an intricate supply chain.
So far, the fire has forced General Motors and Mazda to stop making cars at some factories. The damaged Magna plant also makes parts for several Ford, Nissan and Chrysler Group vehicles. Ford, Nissan and Chrysler factories have stayed open, but it's uncertain for how long as Magna studies options to reopen the plant or make parts elsewhere.
If the Magna plant, which makes ceilings, consoles and other interior parts, is closed for a long time, it could hurt the automakers' sales if inventories become depleted on dealer lots just as the big spring and summer auto sales months approach.
For the past three decades, auto companies have cut costs and become more efficient by going to a just-in-time parts delivery system so they can avoid paying for parts stockpiles.
- Associated PressAlso in Business
l CBS buys Clicker, retains CEO: CBS agreed to buy Clicker Media and named that company's chief executive, Jim Lanzone, to replace the departing head of CBS Interactive. Financial terms weren't disclosed, according to a statement Friday by CBS. Lanzone, former chief executive of Ask.com, will oversee CBS Interactive's worldwide operations. He assumes the role held by Neil Ashe.
l McDonald's CEO gets a raise, but makes less: The chief executive of McDonald's received a pay package worth nearly $9.7 million during fiscal 2010, which was a 45 percent drop from the year before. The drop is largely because of the timing of long-term bonuses that McDonald's executives receive only every three years. Jim Skinner's salary increased 3 percent to $1.4 million and his annual performance bonus was raised by 38 percent. Skinner got an $8.3 million long-term bonus in 2009 and isn't up for another such bonus until 2012.
- From news services