Yorkshire Building Society has said that they are responding to the needs of their consumers, which is why they are offering products with lower payments, perfect for this current credit crisis.

The new lower mortgage rate will be 4.99% however; this comes with a higher fee of 3%, this product has been designed for borrowers who wish to keep their monthly rates down.

Mortgage product manager at Yorkshire, Tom Girling has said “We understand that this mortgage will not suit all borrowers, but it is offered as an option for those who may be finding that their monthly income is stretched to the limit. For borrowers who can afford a little more each month, we have mortgage options with lower fees and no fee products.”

Yorkshire Building Society has also lowered their rates by as much as 0.5% on a rage of their products, from

Yorkshire has also cut rates by as much as 0.5% on a selection of two-year, three-year, five-year and ten-year fixed rates.

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Ron Sandler, Northern Rock Executive Chairman decided to appoint Hoffman as chief executive, he will take on the role from October 1. He comes straight from Barclays; he was their vice-chairman as well as a former chairman of Barclaycard.

Hoffman has been with Barclays since 1982, he also went for the role of chief executive in 2003, but lost out to John Varley.

Mr. Hoffman hopes that he will be able to lead Northern Rock through these troubled times and to help them gain back their strength.

The troubles over at Northern Rock began back in September 2007, as a result of their exposure to capital markets. As a result they were unable to raise funds in the wake of the credit crunch.

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Broker, Mergie has said that there seems to be an oversupply, in 2005 that same house sold for $110,000. Fannie Mae has acquired twice as many homes through foreclosure, it is these unsold properties that are now weighing heavy on the company’s stock.

Fannie Mae lost half of their stock since June 5, part of this problem were late payments along with a huge number of foreclosures.

Both Fannie Mae and Freddie Mac owned a record $6.9 billion of foreclosed homes on March 31. This figure is huge when you consider that $8.56 billion are owned by all 8,500 U.S. commercial banks and savings and loans.

Economists Ethan Harris and Michelle Meyer have said that both Fannie Mae and Freddie Mac stand to lose $1.39 billion on the foreclosed houses they currently own.

Read more at Bloomberg

Citigroup has said that Klein is leaving to pursue other opportunities. 44-year old Klein was the banks co-chief of trading and investment banking division for 10-months.

Chief executive, Mr. Pandit has been restructuring the bank after almost $55 billion of write-downs and losses linked to the collapse of the subprime mortgage market.

On Friday Citigroup posted a smaller than expected loss of $2.5 billion, this lead to a rise in shares of 20 percent.

On Monday Citigroup’s shares rose by 1.8 percent or 34 cents, shares are now at $19.69.

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Just 8.3 per cent of HBOS shareholders took up the rights to buy new shares, which had closed on Friday. Underwriters Morgan Stanley and Dresdner Kleinwort who fully underwrote the capital rising, they sold another 29.5 per cent at the rights price of 275p on Monday.

Both investment banks will now take at least 40 per cent of the stock; they will now have 932 million shares.

The reason that the take-up for the rights issue was so low was because HBOS shares traded under the offer price just days before the lead up to the closing offer.

HBOS shares along with a number of other UK banks had been battered as a result of the current economy and the constant threat of a recession.

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Blanchflower has said “I think we are going into recession and we are probably in one right now.” Blanchflower has been calling for an interest rate cut for some time, he said “It’s not too late to stop it but we have to act right now. Monetary policy has been far too tight for too long.”

Blanchflower fears that this downturn could prove much worse for the UK than the US, unemployment is already up and there are now fears that interest rates could jump to 7 per cent, current levels are at 5 per cent.

Blanchflower has told his Bank of England colleagues that they should worry less about inflation, as he feels that this is just temporary. He thinks that his colleagues should make the decision to cut interest rates sharply.

It certainly looks as if the UK is entering its first recession in two-decades, but it is not to late to stop it from happening, the Bank of England needs to act quick.

Source

Underwriters to the funding, Morgan Stanley and Dresdner Kleinwort, are now faced with the tough task of selling a huge number of leftover shares at 275p or above over the next two days.

Many financial experts believe that this is a tall order and it is likely that both will be left with a huge stake. There was a ray of hope on Friday however; as shares rose to 282p, this would make it easier to off load some shares.

Just last month owners of Halifax had expected first half writedowns to reach £1bn, they also warned that the UK economy would continue to slow as house prices fell further than expected.

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Freddie Mac who are sponsored by the US government are also thinking about selling securities and reducing its dividend, while they prepare to issue $5.5 billion of stock. Matthew Jozoff, JPMorgan Chase & Co. analyst has said in a report last week that the growth in mortgage holdings for Fannie Mae and Freddie Mac will be “weak.”

He also added “This just means much less credit availability for mortgage borrowers, they were teed up to be saviors of the mortgage crisis, but now they’ve got their own capital issues.”

Both the Bush administration and Congress are hoping that both companies will be able to pull the U.S. out of the housing slump, as they purchase mortgage from banks, providing money to make new loans.

Both these companies will have a tough job on their hands as Treasury Secretary Henry Paulson had to try and get Congressional approval last week to extend the credit for both banks.

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Bradford & Bingley’s share price is now just 52p, this meeting is now the chance to hold the troubled lender to account. Shareholders including Standard Life, Legal & General, Prudential and Insight Investments have agreed to buy about £145 million of shares between them.

Barclays and Lloyds TSB have also promised to purchase a further £150 million of the issue. Citigroup and UBS who are underwriting the rights to buy issue could end up with £105 million on their books.

Bradford & Bingley recently denied that they needed the extra cash, well today shows that they do.

To keep up to date with the shareholder meeting Click Here

It seems that this trend of banks at risk is more of a problem for US banks rather than European firms. Experts have said that default risk has risen significantly for U.S. banks and brokers however; this seems to be a different story in Europe.

That is not to say that other banks outside the U.S. are not having their own problems, just look at all the trouble surrounding UK bank Northern Rock, they had to get help from their government.

If you head over to seekingalpha.com, they have a table which shows the bank and broker default list, and you can clearly see that it is the U.S. banks that are right up the top of the list.

The table shows percent change in equities and default risk over the last week for 15 global financial firms.