Business Briefs: Tuesday, August 26, 2008

Published: August 26, 2008

NEW YORK — Reported incidents of mortgage fraud jumped 42 percent nationwide, with Florida reporting the highest number of cases, according to industry data released Monday.

Properties in the Sunshine State accounted for nearly a quarter of all mortgage fraud incidents, the Mortgage Asset Research Institute said. California ranked second, followed by a three-way tie for third among Illinois, Maryland and Michigan.

The report is based on data submitted by MARI subscribers about loans that were originated in the first quarter of this year and have since been classified as fraudulent.

The most common mortgage fraud cases included misrepresenting income, employment history, and debt and assets.

Mortgage fraud has represented about $1 billion in losses over the past decade, the Mortgage Bankers Association has said.

WASHINGTON — Shares of Fannie Mae and Freddie Mac soared Monday in a respite from their battering in recent days, while some regional banks saw their stocks sink on worries they could be swept up in the turmoil surrounding the mortgage finance giants.

Freddie completed a $2 billion debt sale, and a Wall Street analyst said a government bailout of the mortgage finance giants may not be inevitable.

But a few regional banks with significant holdings in Fannie and Freddie preferred stocks followed the rest of the market down amid questions over whether federal regulators would step in to rescue the two government-sponsored companies.

Shares of Freddie jumped 48 cents, or 17.1 percent, to $3.29 Monday, while Fannie climbed 19 cents, or 3.8 percent, to $5.19.

LOS ANGELES — Metro-Goldwyn-Mayer Studios Inc. says it is "not for sale” following a report in BusinessWeek Saturday that MGM's owners were looking to sell the movie company for $5.2 billion.

The studio was taken private for nearly $5 billion in 2005 by Providence Equity Partners, TPG, Sony Corp. of America and Comcast Corp.

The company said its owners were committed to growing the studio and denied there was an asking price.

MGM did say, however, that it has retained Goldman Sachs to enhance its long-term capital structure.

WASHINGTON — Interest rates on short-term Treasury bills fell in Monday's auction for the second consecutive week, with the rate on three-month bills falling to the lowest level in a month.

The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 1.71 percent, down from 1.85 percent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 1.925 percent, down from 1.98 percent last week.

The three-month rate was the lowest since the bills averaged 1.695 percent on July 28. The six-month rate was the lowest since 1.92 percent on Aug. 4.

NEW ORLEANS — Herreast Harrison wanted to rebuild after Katrina and thought she did everything right: She hired a contractor who seemed kind and listened to Christian music on the job. Months later, she claimed, he pocketed $57,000 and walked off with work undone, leaving a mess behind.

Harrison said it took thousands more to put things straight.

Three years after Hurricane Katrina, complaints about contractors continue, swamping legal aid attorneys and watchdog groups alike. Victims are left coping with shoddy work, incomplete work and sometimes outright fraud.

"It seems like it's going on and on,” said Cynthia Albert, a spokeswoman for the local Better Business Bureau.

ALBANY, N.Y. — Twelve states, New York City and the District of Columbia are suing the Environmental Protection Agency, claiming the Bush administration has failed to rein in emissions from oil refineries.

New York Attorney General Andrew Cuomo said Monday the suit is aimed at forcing the EPA to adopt regulations to reduce oil industry pollution that contributes to global warming.

Other states in the suit are California, Connecticut, Delaware, Massachusetts, Maine, New Hampshire, New Mexico, Oregon, Rhode Island, Vermont and Washington.

It is the latest by states critical of the EPA's record. EPA officials did not immediately return a call for comment.

The Associated Press

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