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MCLEAN, VA- Freddie Mac (OTCQB: FMCC) released today its U.S. Economic and Housing Market Outlook for January showing that four of the key housing indicators are all moving in the right direction, which bodes well for an ongoing recovery. A short preview video, and the complete January 2014 U.S. Economic and Housing Market Outlook are available here.

Outlook Highlights and First Quarter Projections
December’s unemployment rate of 6.7 percent remains stubbornly high. It may take another two years until labor market gets back to full employment.

Mortgage delinquency rates at 5.88 percent have been nearly cut in half from their peak, but they are still very high from their long term normal average of approximately 2 percent.

From 1999-2006, mortgage payments on a hypothetical 30-year fixed-rate mortgage would have increased by 50 percent more than income growth. Currently, payment-to-income ratios are only 60 percent of the level we had in 1999 suggesting room for continued house price growth.

When measured against the single-family housing stock, historically home sales have averaged about 6 percent of the stock at an annual rate. During the housing boom, home sales increased up to about 9 and then plummeted down to around 4 percent. With home sales at a 5.8 million pace in 2014 this rate should rise up to 5.7% for 2014.

Quote attributed to Frank Nothaft, Freddie Mac vice president and chief economist. “As we start 2014, the housing recovery continues its steady pace. House-price gains will likely moderate from last year’s pace but rise about 5 percent in national indexes. Home sales, as well as other key indicators, continue to trend in the right direction, although in some markets we are seeing the sales recovery strengthen while many others remain weak.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing.

This Press Release is courtesy of www.freddiemac.com

NEW YORK-A consortium of investment banks today announced their support of the Green Bond Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB. These Principles were developed with guidance from issuers, investors and environmental groups and serve as voluntary guidelines on recommended process for the development and issuance of Green Bonds. They encourage transparency, disclosure and integrity in the development of the Green Bond market.

These Green Bond Principles suggest process for designating, disclosing, managing and reporting on the proceeds of a Green Bond. They are designed to provide issuers with guidance on the key components involved in launching a Green Bond, to aid investors by ensuring the availability of information necessary to evaluate the environmental impact of their Green Bond investments and to assist underwriters by moving the market towards standard disclosures which facilitate transactions.

These Principles build on first-to-market issuances by multilaterals and provide a platform for other future Green Bond issuers to direct funding to Green Projects. They are complemented by an appendix of established definitions of Green Project categories that were developed by multilaterals, non-profit and non-government organizations, and other relevant stakeholders. Read more about the Green Bond Principles here.

The four banks that served as a drafting committee for these Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank and JPMorgan Chase – will propose in 2014 a governance process that will allow for diverse stakeholder input into the Green Bond Principles. It is anticipated that an independent third party will be designated to serve as a secretariat whose administrative duties will include facilitating information exchange with issuers, investors, underwriters, and other stakeholders such as non-profit environmental organizations, non-government organizations, academics and other thought leaders.

COMMENTS FROM SUPPORTING BANKS:

Bank of America
“The development of a robust and liquid market for green bonds is an important progression for debt markets,” said Suzanne Buchta, Global Co-head of Green Debt Capital Markets at BofA Merrill. “In co-authoring these principles we attempt to help standardize the product and we hope to catalyze investment into environmentally sustainable projects, something to which our firm is very committed.”

Citi
“Citi is proud to be a co-founder of the Green Bond Principles as a voluntary guideline for bond issuers who are deploying capital to environmentally beneficial purposes,” said Michael Eckhart, Citi’s Global Head of Environmental Finance. “Our experience placing Green Bonds to date suggests that this will be a helpful guideline for corporate and public sector issuers.”

Crédit Agricole CIB
Tanguy Claquin, Managing Director at Crédit Agricole CIB commented, “We are very pleased to have co-authored and announced the establishment of the Green Bond Principles. This is an important first step towards a more coherent approach to the market of Green and Sustainability Bonds, which will ultimately increase its attractiveness for investors thus encouraging investments into sustainability projects.”

JPMorgan Chase & Co.
“Increasing the amount of capital targeted to address pressing environmental challenges such as climate change is critical,” said Marilyn Ceci, Managing Director in the Corporate & Investment Bank at JPMorgan Chase. “JPMorgan Chase is pleased to have co-authored the Green Bond Principles, which involved strong collaboration among colleagues in our Corporate & Investment Bank and Environmental Affairs office. By providing transparency and integrity to the Green Bond market and bolstering investor confidence, we expect the Green Bond Principles will expand capital allocation to projects that provide environmental benefits.”

BNP Paribas
“BNP Paribas is proud to partner with our fellow institutions to support the development of a robust Green Bond Market. Today’s announcement is a crucial early step to foster the creation of a new transparent marketplace for socially responsible capital-raising and investment,” said Jim Turner, Head of Debt Capital Markets for North America.

Daiwa
“The GBP is a wake-up call. It will help bring this most important product and its message to the forefront and into the mainstream bond world,” said Jose Padilla, Head of US Debt Capital Markets at Daiwa.

Deutsche Bank
“As a carbon neutral bank, Deutsche Bank believes that the new Principles will play an important role in unlocking the green market capital necessary to finance the transformation to a cleaner and more sustainable future. We are pleased to be part of this collaborative effort,” said Hakan Wohlin Deutsche Bank’s Global Head of Debt Origination.

Goldman Sachs
“We are excited about continued developments in the area of green bonds as an important mechanism through which we can help harness the deep and liquid fixed income capital base for environmentally beneficial solutions.” said Martin Weber, Head of SSA and Growth Markets Origination. “Goldman Sachs has had a long standing commitment to furthering market-based solutions to address critical environmental issues and we look forward to helping further catalyze financing and investments.”

HSBC
“The Green Bond market grew fivefold last year, with USD10 billion raised by the public sector, corporates and financial institutions. The Green Bond Principles are an excellent initiative to increase transparency and disclosure in this market, and to foster continued growth in investments which help combat climate change.” said Ulrik Ross, Managing Director at HSBC.”

Mizuho
Mark Wheatcroft, Head of Debt Capital Markets at Mizuho International commented: “Mizuho is proud to support the development of the Green Bond Principles, which will act as a measure of quality assurance for all involved in this exciting and developing market.”

Morgan Stanley
“Morgan Stanley is proud to be one of the leading underwriters of Green Bonds, with USD 4.75 billion of issuance across 7 Supranational, Agency and Corporate deals in 2013,” said Navindu Katugampola, Vice President at Morgan Stanley. “We believe that the Green Bond Principles will help act as a catalyst to develop this rapidly growing market, by providing a clear set of voluntary guidelines for issuers, investors and underwriters. We are exceptionally pleased to support this effort as part of our overall commitment to sustainable finance.”

Rabobank
“The world faces enormous challenges in the next 40 years. It needs investments that are not only large scale but also focused: financing sustainable food production and supply, growing energy demands, sustainable basic materials and more. Rabobank is proud to be part of the Green Bonds Principles and to be able to contribute to the future developments in this initiative. We will use our knowledge of amongst others sustainable agriculture, food & beverage sectors, renewable energy and developments in the biobased and circular economy. Having been involved in several sustainable Green Bonds we are convinced this will be of help to grow this important market,” said Marco Roddenhof, Global Head Capital Markets Rabobank International.

SEB
“It has been a great pleasure, as a co- founder of the green bond market, to take part in the ongoing development of the market and thereby acknowledge the trust we have been shown by our investors and the issuers we represent. We believe the principles will secure a common understanding and thereby create the homogenous market development needed to allow further growth,” said Christopher Flensborg, Head of Sustainable Products and Product Development at SEB.

This Press Release is courtesy JP Morgan Chase

Bank of America Merrill Lynch today announced a social impact partnership with New York State and Social Finance Inc. that resulted in a successful capital raise of $13.5 million to fund a new pay-for-success program. The offering proceeds provided by private and institutional investors will be used to fund a 5 ½-year program focused on comprehensive reentry employment services to 2,000 formerly incarcerated individuals in New York City and Rochester, N.Y.

Social impact partnerships provide an innovative way to finance social programs. These programs provide funding – often in the form of fixed income or private equity offerings (referred to generically as “social impact bonds”) – for selected nonprofits with a proven track record of success, and enable governments to save money and pay only for positive results. If a pay-for-success program meets identified success metrics, private and institutional investors have the potential to earn positive financial returns. Through these programs, the public, private and nonprofit sectors work together to achieve positive social outcomes.

“We are proud to join New York State, Social Finance and others in this landmark program. Through partnerships such as this, and the preferences of today’s investors, innovative social finance has truly come of age,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “One of the most pronounced trends among our clients is for their investments to not only earn a return but also to help drive social change in their communities and in society. We’re unlocking the potential for this type of investing, enabling clients to direct capital to programs and organizations proven to produce positive outcomes, and taking an important step toward a scalable new marketplace.”

This new social impact investment opportunity was available only to qualified high net worth and institutional clients of Merrill Lynch and U.S. Trust*, as well as other investors identified by Social Finance. The proceeds of the project will finance programs delivered by the Center for Employment Opportunities (CEO), a world-class provider of training and employment service programs to formerly incarcerated individuals in New York.

“This public-private partnership applies financial innovation to achieve a common goal: increase employment and improve public safety in New York,” said Tracy Palandjian, chief executive officer and co-founder of Social Finance Inc. “The investment is focused on directing resources toward prevention, tackling the source of the problem rather than treating the symptoms, and equipping people with training to help them lead productive and healthy lives.”

Formerly incarcerated individuals face numerous challenges when seeking employment upon release from prison. As a result, many of these individuals continue to engage in criminal behavior and return to prison or jail within three years of their release1. Corrections costs have quadrupled during the last 20 years, making prison spending the states’ fastest growing budget item after Medicaid2. In 2012, New York spent $3.6 billion on state prisons, or more than $60,000 per inmate.

The goal of this pay-for-success program is to reduce recidivism and increase employment by providing participants work experience and supportive coaching. The objectives of the program are to reduce social and financial costs associated with prison recidivism, and to provide a positive impact on family support and public safety. Specifically, this program aims to:

Expand proven workforce reentry services to formerly incarcerated individuals in need.
Help to break the downward cycle of recidivism among these individuals.
Lower government remediation costs, including incarceration and criminal justice services.
Save taxpayer dollars related to criminal justice expenditures, victim costs of crime, and public assistance.
Overview of the investment and partners involved

Social Finance identified the opportunity, conducted due diligence to select service providers like CEO, and worked with Bank of America Merrill Lynch to structure the partnership with New York State and the U.S. Department of Labor. Social Finance will also provide ongoing performance management throughout the life of the project.
CEO will provide life skills training, transitional employment, job placement and retention support to 2,000 formerly incarcerated individuals during a four-year period.

The U.S. Department of Labor will provide outcome-based payments for the benefit of investors for the first half of the program (first 1,000 served), while New York State will make such payments for the second half of the program (next 1,000 served).

Chesapeake Research Associates will serve as validator to ensure that outcomes are measured according to the specified methodology designed to determine the success of the program.

Bank of America Merrill Lynch worked with Social Finance to define the terms of the investment and acted as the placement agent for the offering to qualified high net worth and institutional investors.
The Robin Hood Foundation provided strong early support by making a commitment to invest in the program. Since 1988, Robin Hood Foundation has focused on finding, funding, and creating programs and schools that generate meaningful results for families in New York’s poorest neighborhoods.

The Rockefeller Foundation provided a $1.32 million guaranty facility to the project, which will cover 10 percent of the investors’ principal should the project fail to repay investors 100 percent of their investment. Throughout its 100-year history, The Rockefeller Foundation has enhanced the impact of innovative thinkers and actors working to change the world by providing the resources, networks, convening power and technologies to move them from idea to impact.

The investment is for 5 ½ years. Investors may lose all of their investment if the program does not meet certain measures of success. Offers to purchase interests in this investment were made pursuant to a private placement memorandum, which contains important information about the risks, performance and other material aspects of the investment.

This Press Release is courtesy of Bankofamerica.com

MINNEAPOLIS — December 20, 2013
We are continuing the process of reaching out to guests across a number of channels including traditional and social media. Also, we have begun notifying, via email, those guests whose emails we have and who shopped in our U.S. stores with a credit or debit card during the period of November 27 and December 15. We expect that all emails will be sent by the end of the weekend.

It is very important for our guests to understand that receiving an email from us or a letter from their financial institution is absolutely not an indication that there has been, or will be, fraud on their card.

We continue to experience significantly higher than normal volume to our call centers and REDcard website, causing delays. We are working around the clock to resolve this issue by continually adding capacity both to our call center and technical systems to meet all of our guests’ needs. For example, in the last 24 hours we have quadrupled the capacity of our online REDcard account management site.

To date, we are hearing very few reports of actual fraud, but are closely monitoring the situation. We want to reassure guests that they will not be held financially responsible for any credit card or debit card fraud.

At this time, there is no indication that there has been any impact to PIN numbers. What this means is their bank PIN debit card or Target debit card still has this additional layer of protection. It also means that someone cannot visit an ATM with a fraudulent card and withdraw cash.

We have no indication that the data that was inappropriately accessed included a guest’s date of birth or social security number.

The CVV data that may have been impacted was data in the magnetic strip and NOT the three or four-digit code visible on the card that guests use that would allow someone to make an online purchase.

In addition, we have already alerted all of the networks (Visa, MasterCard, Discover and American Express) and provided the affected card numbers of guests who may have been impacted. The networks, in turn, are providing the affected card numbers to the financial institutions of our guests via a “batch” or “CAMS alert.” This alert process allows card providers to take steps to enact additional fraud monitoring. For our REDcard holders, in addition to the robust fraud monitoring system we already had in place, we have added additional layers of security and fraud monitoring to their cards.

CEO Gregg Steinhafel released a statement saying: “Yesterday we shared that there was unauthorized access to payment card data at our U.S. stores. The issue has been identified and eliminated. We recognize this has been confusing and disruptive during an already busy holiday season. Our guests’ trust is our top priority at Target and we are committed to making this right.

We want our guests to understand that just because they shopped at Target during the impacted time frame, it doesn’t mean they are victims of fraud. In fact, in other similar situations, there are typically low levels of actual fraud. Most importantly, we want to reassure guests that they will not be held financially responsible for any credit and debit card fraud. And to provide guests with extra assurance, we will be offering free credit monitoring services. We will be in touch with those impacted by this issue soon on how and where to access the service.

We understand it’s been difficult for some guests to reach us via our website and call center. We apologize and want you to understand that we are experiencing unprecedented call volume. Our Target teams are working continuously to build capacity and meet our guests’ needs.

We take this crime seriously. It was a crime against Target, our team members, and most importantly, our guests. We’re in this together, and in that spirit, we are extending a 10% discount – the same amount our team members receive – to guests who shop in U.S. stores on Dec. 21 and 22. Again, we recognize this issue has been confusing and disruptive during an already busy holiday season. We want to emphasize that the issue has been addressed and let guests know they can shop with confidence at their local Target stores.”

Target confirmed it is aware of unauthorized access to payment card data that may have impacted certain guests making credit and debit card purchases in its U.S. stores. Target is working closely with law enforcement and financial institutions, and has identified and resolved the issue.

“Target’s first priority is preserving the trust of our guests and we have moved swiftly to address this issue, so guests can shop with confidence. We regret any inconvenience this may cause,” said Gregg Steinhafel, chairman, president and chief executive officer, Target. “We take this matter very seriously and are working with law enforcement to bring those responsible to justice.”

Approximately 40 million credit and debit card accounts may have been impacted between Nov. 27 and Dec. 15, 2013. Target alerted authorities and financial institutions immediately after it was made aware of the unauthorized access, and is putting all appropriate resources behind these efforts. Among other actions, Target is partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident.

This Press Release is courtesy of Target.com

Washington, DC — The board of directors of the Export-Import Bank of the United States (Ex-Im Bank) today adopted revisions to its environmental procedures and guidelines governing high-carbon intensity projects, aligning the Bank with President Obama’s goal of reducing carbon pollution, while maintaining the Bank’s focus on continuing to help create and support American export-related jobs.

“No one has been more supportive of U.S. exports and the American jobs they produce and maintain than this Bank and this board. Since 2009, we have supported nearly 1.2 million jobs.” said Fred P. Hochberg, Ex-Im chairman and president. “We can’t do it, however, without considering the environmental costs associated with transactions.”

The revised guidelines adopted today require carbon capture and storage in most countries in order to secure Bank financing for coal-fired power plants, but would provide flexibility for the Bank with respect to the important energy needs of the poorest countries in the world.

The policy revisions were drafted by Ex-Im Bank staff and reviewed extensively by exporters, the public, leading environmental groups, the Administration and other federal agencies through an extensive and transparent vetting process.

“The Bank engages in an important balancing act — in supporting our exporters, we have to weigh the potential impacts on the environment associated with our financing,” Hochberg said. “This balancing act is a Congressional mandate, is a directive in our Charter, is part of our mission and it is something we at the Bank take seriously.

Hochberg noted that: “Our proposed guidelines would balance the Bank’s obligations to its many different stakeholders and also its efforts to support the growth of export-related U.S. jobs.”
“Without guidelines or limits, ever-increasing numbers of new coal plants worldwide will just continue to emit more carbon pollution into the air we breathe,” said Hochberg. “But America cannot do this alone. I strongly support the Administration’s efforts to build an international consensus such that other nations follow our lead in restricting financing of new coal-fired power plants.”

Ex-Im has been a leader among the world’s export credit agencies (ECAs) in adopting measures to protect the environment while financing exports.
•In 1995 the Bank was the first ECA to adopt environmental procedures and guidelines governing its export financing.
•In 1999 the Bank began tracking and publicly reporting projected carbon emissions produced by projects it financed. Even today Ex-Im is the only ECA that tracks and reports carbon emissions.
•In 2009 the Bank approved a formal carbon policy, and in 2010 it approved supplemental guidelines for high-carbon intensity projects.

The guideline revisions approved today are not designed to impact mining projects or coal exports produced by American coal miners. Ex-Im staff have worked with other agencies to ensure that the flexibility of these guidelines would be consistent with those of other federal agencies.

In addition to approving the revisions to its environmental guidelines, the board today approved seven transactions that together will support more than 11,200 U.S. export-related jobs.

This Press Release is courtesy of www.exim.gov

Five federal agencies on Tuesday issued final rules developed jointly to implement section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”).

The final rules prohibit insured depository institutions and companies affiliated with insured depository institutions (“banking entities”) from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own account. The final rules also impose limits on banking entities’ investments in, and other relationships with, hedge funds or private equity funds.

Like the Dodd-Frank Act, the final rules provide exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds. The final rules also clarify that certain activities are not prohibited, including acting as agent, broker, or custodian.

The compliance requirements under the final rules vary based on the size of the banking entity and the scope of activities conducted. Banking entities with significant trading operations will be required to establish a detailed compliance program and their CEOs will be required to attest that the program is reasonably designed to achieve compliance with the final rule. Independent testing and analysis of an institution’s compliance program will also be required. The final rules reduce the burden on smaller, less-complex institutions by limiting their compliance and reporting requirements. Additionally, a banking entity that does not engage in covered trading activities will not need to establish a compliance program.

The Federal Reserve Board announced on Tuesday that banking organizations covered by section 619 will be required to fully conform their activities and investments by July 21, 2015.

This Press Release is courtesy Commodities Futures Trading Commission

Washington D.C., Oct. 23, 2013 — The Securities and Exchange Commission today voted unanimously to propose rules under the JOBS Act to permit companies to offer and sell securities through crowdfunding.
Crowdfunding describes an evolving method of raising capital that has been used outside of the securities arena to raise funds through the Internet for a variety of projects ranging from innovative product ideas to artistic endeavors like movies or music. Title III of the JOBS Act created an exemption under the securities laws so that this type of funding method can be easily used to offer and sell securities as well. The JOBS Act also established the foundation for a regulatory structure for this funding method.

SEC Chair Mary Jo White noted that the intent of the JOBS Act is to make it easier for startups and small businesses to raise capital from a wide range of potential investors and provide additional investment opportunities for investors.

“There is a great deal of excitement in the marketplace about the crowdfunding exemption, and I’m pleased that we’re in a position to seek public comment on a proposal to permit crowdfunding,” said Chair White. “We want this market to thrive in a safe manner for investors.”

The SEC is seeking public comment on the proposed rules for a 90-day period following their publication in the Federal Register.
COURTESY SECURITIES EXCHANGE COMMISSION

SAN FRANCISCO — The U.S. Department of Labor today announced that it obtained a consent order requiring the fiduciaries of the Parrot Cellular Employee Stock Ownership Plan to pay $4,181,818 to the plan. The settlement resolves a suit filed in April 2012 after an investigation by the department’s Employee Benefits Security Administration found violations of the Employee Retirement Income Security Act. The department alleged that plan fiduciaries caused or permitted the ESOP to purchase Parrot Cellular stock for more than fair market value.

The suit, filed in the U.S. District Court for the Northern District of California, named as defendants Dennis Webb, the principal owner of California-based Entrepreneurial Ventures Inc.; Matthew Fidiam and J. Robert Gallucci, EVI executives and ESOP trustees; and Consulting Fiduciaries Inc., an Illinois company that served as the independent fiduciary for the ESOP during a November 2002 stock purchase. EVI operates Parrot Cellular telephone retail stores and is the sponsor of the worker retirement plan.

“Employee stock ownership plans can have great benefits for workers, but only if they adhere to the laws that govern them,” said Secretary of Labor Thomas E. Perez. “We are very pleased to have resolved this matter in a way that brings the plan into compliance with the law and benefits the plan’s participants.”

“Officials responsible for employee stock ownership plans are legally required to act prudently and solely in the interests of plan participants when purchasing or selling employer stock,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “This is true for all fiduciaries of all employee benefit plans covered by ERISA.”

Under the terms of the settlement agreement, Consulting Fiduciaries agreed to pay $2 million to the ESOP to settle the allegations. Webb, Fidiam and Gallucci agreed to collectively pay $1.5 million to the ESOP, and Webb agreed to pay an additional $681,818 to the ESOP.

COURTESY: US LABOR DEPARTMENT

The U.S. Department of Education today announced the official FY 2011 two-year and official FY 2010 three-year federal student loan cohort default rates (CDR). The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010.

The Department is replacing its CDR calculations from two-year to three-year calculations as required by the Higher Education Opportunity Act of 2008. Congress included this provision in the law because more borrowers default after the two-year monitoring period; thus, the three-year CDR better reflects the percentage of borrowers who ultimately default on their federal student loans.

The FY 2010 three-year cohort default rate is the second that the Department has issued, following the release of last year’s FY 2009 three-year cohort default rate. Under the law, only three-year rates will be calculated starting next year. At that time, three 3-year rates will have been calculated (FY 2009 published in 2012, FY 2010 published in 2013, and FY 2011 published in 2014).

“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Secretary of Education Arne Duncan said. “The Department will continue to work with institutions and borrowers to ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions, and students—as well as the business, labor, and philanthropic leaders—to improve college affordability for millions of students and families.”

To ensure that students are aware of the flexible income-driven loan repayment options available through Federal Student Aid (FSA), this fall the Department will expand its outreach efforts to struggling borrowers to inform them about the different plans. The Department has also released new loan counseling tools to help students and families make more informed decisions about planning for college. Students and families can visit www.studentaid.gov for more information.

Calculation and breakdown of the rates

For-profit institutions continue to have the highest average two- and three-year cohort default rates at 13.6 percent and 21.8 percent, respectively. Public institutions followed at 9.6 percent for the two-year rate and 13 percent for the three-year rate. Private non-profit institutions had the lowest rates at 5.2 percent for the two-year rate and 8.2 percent for the three-year rate.

The two-year CDR increased over last year’s two-year rates for both the public and for-profit sectors, rising from 8.3 percent to 9.6 percent for public institutions, and from 12.9 percent to 13.6 percent for for-profit institutions. CDRs held steady for private non-profit institutions at 5.2 percent. The three-year CDR increased over last year’s three-year rates for both the public and private non-profit sectors, rising from 11 percent to 13 percent for public institutions, and from 7.5 percent to 8.2 percent for private non-profit institutions. CDRs decreased for for-profit institutions, slipping from 22.7 percent to 21.8 percent.

The two-year default rates announced today were calculated based on a cohort of borrowers whose first loan repayments were due in FY 2011 (between Oct. 1, 2010 and Sept. 30, 2011), and who defaulted before Sept. 30, 2012. More than 4.7 million borrowers from nearly 6,000 postsecondary institutions entered repayment during this window of time, and more than 475,000 defaulted on their loans, for an average of 10 percent.

The three-year rates announced today were calculated based on the cohort of borrowers whose loans entered repayment during FY 2010 (between Oct. 1, 2009, and Sept. 30, 2010), and who defaulted before Sept. 30, 2012. More than 4 million borrowers from over 5,900 postsecondary institutions entered repayment during this window of time, and approximately 600,000 of them defaulted, for an average of 14.7 percent.

Sanctions

No sanctions will be applied to schools based on the three-year rates until the CDRs have been calculated for three fiscal years, which will be with the release of the FY 2012 rates next year. Until then, sanctions will continue to be based on the two-year CDR only.

Certain schools are subject to sanctions for having two-year default rates of 25 percent or more for three consecutive years, or over 40 percent for one year. As a result, these schools will face the loss of eligibility in federal student aid programs unless they bring successful appeals. Please click here for more information about possible sanctions: http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr2yr.html

The Department provides extensive assistance to schools to help minimize institutional cohort default rates. FSA provides a variety of training opportunities to the higher education community, including webinars and online training, participation in state, regional and national association training forums, and through face-to-face training events such as the FSA Training Conference for Financial Aid Professionals. In addition, any school with a three-year CDR of 30 percent or more must establish a default prevention task force and submit a default management plan to the Department. There were 221 schools that had three-year default rates over 30 percent.

Borrowers who need assistance in repaying their federal student loans can visit www.studentaid.gov or can contact the holders of their loans to learn about repayment options. For help locating their loan holders, borrowers may access www.nslds.ed.gov or contact the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243).
COURTESY: US DEPARTMENT OF EDUCATION

Earlier this week, Secretary Lew attended a Making Home Affordable (MHA) Help for Homeowners event in Landover, Maryland. While there, the Secretary met with homeowners affected by the financial crisis and participated in a roundtable discussion with the DC metropolitan area’s housing leaders to discuss local and national approaches to foreclosure prevention.

Nearly 900 homeowners attended Tuesday’s event to meet face-to-face with their mortgage servicer, and U.S. Department of Housing and Urban Development (HUD) approved housing counselors. Together with the Hope Now Alliance and NeighborWorks® America, Treasury and HUD have co-hosted 88 Help for Homeowners events across the country, including three in Maryland, and reached more than 75,000 homeowners.

Helping responsible homeowners is a cornerstone of the President’s efforts to secure a better bargain for the middle class. MHA offers some of the deepest and most dependable assistance available to prevent foreclosure and help homeowners recover from the impact of the recession. That’s why earlier this year we extended the application deadline for MHA until December 31, 2015. The program is a critical part of our efforts to reach as many struggling homeowners as possible while the need still exists.

Between private and public sources, almost seven million permanent loan modifications and other homeowner assistance actions have been taken since 2009, more than double the number of foreclosure completions. In MHA alone, more than 1.7 million homeowner assistance actions have taken place, including 1.2 million Home Affordable Mortgage Program (HAMP) permanent loan modifications. In the DC metropolitan area, more than 50,000 homeowners have received assistance through HAMP, the sixth highest in the nation.

While there is still more work to do, our initiatives have directly and indirectly helped millions of homeowners avoid foreclosure. The housing market may have turned a corner, but millions still live under the threat of foreclosure, and that is why we will continue working hard to help our neighbors impacted by the crisis stay in their homes.

For more information about the Making Home Affordable Program and events in your area, visit MakingHomeAffordable.gov or call the Homeowner’s HOPE™ Hotline at (888) 995-HOPE (4673).
COURTESY: US TREASURY DEPARTMENT

A decade ago, the rate at which new businesses failed has started to change. According to industry analysts, the chances for a new business to succeed today is far more greater than ten years ago.

Democrats and Republicans in congress are at each others throats when it comes to the debt ceiling and budgetary revisions. The balance of power is having a significant effect on the ability of the President to maintain considerable bargaining power to advance his agenda.

Buying insurance policy these days is a very serious endeavor. It has maybe a twist if have had a previous policy attached to your name or if you have multiple forms of insurance policies that are still current.

New Rules are affecting the way banking is conducted in the tri-state area of New York.