QUOTE OF THE DAY “Although [Southwest Airlines] have
transitioned in recent years to more of a revenue-focused airline, they’ve always been an airline that got the operation right.” Seth Kaplan, managing partner at Airline Weekly, about Southwest’s latest ranking as the airline with the worst on-time percentage.
Article, 1DWells Fargo, Fannie Mae settle loan case
WASHINGTON - Wells Fargo & Co. said Monday that it agreed to pay $591 million to Fannie Mae to settle disputes over soured mortgages that the bank sold to the seized housing finance giant during the subprime housing boom.
The agreement covers loans originated by Wells Fargo before 2009 that Fannie Mae was trying to force the bank to buy back. The deal “resolves substantially” all repurchase issues related to those loans, the company said.
Wells Fargo will pay $541 million in cash to Fannie Mae, with the rest covered by credits from earlier repurchases.
Fannie Mae and its sibling firm, Freddie Mac, were seized by the federal government in 2008 as they teetered near bankruptcy because of bad loans they had purchased from banks. The firms bundled the mortgages into securities and could try to force banks to buy back loans that did not meet certain guidelines.
Fannie Mae and Freddie Mac have been aggressively pushing banks to repurchase so-called legacy loans the firms had bought before they were placed under government conservatorship.
“This agreement represents a fitting conclusion to our year of hard work to put legacy issues in the rear-view mirror and begin 2014 focused on improving the future of housing finance,” said Fannie Chief Executive Timothy Mayopoulos.
Banks have agreed to pay Fannie about $12.7 billion this year to resolve disputes over toxic mortgages. The largest deal was a $10.3 billion settlement with Bank of America Corp. in January.
In October, Wells Fargo agreed to an $869 million settlement with Freddie Mac on pre-2009 mortgages.
Blackstone invests in Crocs as CEO exits
NIWOT, Colo. - The company that makes Crocs shoes is getting a $200 million bailout from a private equity fund, and its chief executive officer is retiring.
Crocs said it will use the money from Blackstone, plus cash on hand, for a $350 million share buyback.
The deal gives Crocs a cash infusion, gives Blackstone two seats on the board and preferred shares that pay a 6 percent dividend, and gives shareholders an additional return by way of the buyback.
Crocs shares peaked above $75 in 2007 as buyers snapped up the clogs known for being comfortable but ugly. But it hasn’t been able to add new products with the same popularity.
Shares fell to about $1 in late 2008 before beginning a recovery. On Monday, Crocs shares rose $2.81 to $16.14 by the close of trading.
Crocs also said late Sunday that CEO John McCarvel is retiring and giving up his board seat in the end of April.
He has been with Crocs since 2005 and had been president and CEO since 2010. The company said it has begun an outside search for his replacement.
McCarvel called the Blackstone investment “a vote of confidence in our company and our brand.”
Crocs also said fourth-quarter revenue will be at the low end of the $220 million to $225 million it had predicted, and its quarterly loss will be at the worse end of the 20 cents to 23 cents per share it had predicted. Analysts surveyed by FactSet had been expecting a loss of 20 cents per share on revenue of $222 million.
Business, Pages 22 on 12/31/2013