US could take 25-40 percent stake in Citi Group

The US government is in talks that could lead to it taking take a 25-40 percent stake in Citigroup, The Wall Street Journal reported Sunday.

"While the discussions could fall apart, the government could wind up holding as much as 40 percent of Citigroup's common stock. Bank executives hope the stake will be closer to 25 percent," the paper reported citing unnamed people familiar with the situation.

"The proposal was made by Citigroup to its regulators. The (Barack) Obama administration hasn't indicated if it supports the plan," the report said citing people with knowledge of the talks.

Continuous disaster for Citigroup

The Citi never sleeps. Well the stock is certainly keeping investors up nights!

Citigroup lost more than one-quarter of its market value as new support from its largest individual investor failed to ease worries over whether it will have enough capital to withstand billions of dollars of potential losses.

Saudi Prince Alwaleed bin Talal said he plans to increase his stake in Citigroup, the No. 2 U.S. bank by assets, to 5 percent from less than 4 percent, calling its shares "dramatically undervalued."

Investors, however, were unimpressed, driving shares down below $5 on Thursday , a level not seen since 1994. Some investors and analysts questioned whether Citigroup would be able to handle billions of dollars in potential credit losses and write-downs in 2009 as the world economy sinks into recession.

The bank could face losses of $20 billion or more next year on loans in commercial real estate, emerging markets and credit cards

Reid calls off vote on auto bailout...Stocks tumble...Family tragedy

WASHINGTON (AP) - Senate Majority Leader Harry Reid has called off a planned vote this week on a $25-billion bailout for the auto industry. He says he wants to figure out some way to help Detroit's struggling Big Three but that congressional efforts have stalled.

NEW YORK (AP) - Worry that the U.S. auto industry could collapse has added to recession jitters on Wall Street. The Dow finished down nearly 430 points today, falling below the 8,000 mark.

KEMAH, Texas (AP) - Authorities in Texas say a teenager fatally shot his father during an argument over a fast-food order, then shot himself. Galveston County sheriff's officials say it happened Sunday when the boy returned home with the wrong order for his father. Both of them died last night at a Houston hospital.

LOS ANGELES (AP) - A federal prosecutor in Los Angeles says a Missouri mother hatched a plot with her daughter and an employee to stage an Internet hoax on a 13-year-old, who later hanged herself. Lawyers have made opening statements in the nation's first cyber-bullying trial.

RAYMONDVILLE, Texas (AP) - A Texas judge has set an arraignment for Vice President Dick Cheney, former Attorney General Alberto Gonzales and other officials accused of involvement in prisoner abuse. The judge says he'll allow them to waive arraignment or have attorneys present rather than appear in person Friday.

No cash-out versus cash-out refinancing

No cash-out refinancing occurs when the amount of your new loan doesn't exceed your current mortgage debt (plus points and closing costs). With this type of refinancing, you can typically borrow up to 95 percent of your home's appraised value.

A cash-out refinancing occurs when you borrow more than you owe on your existing mortgage. In this case, you are often limited to borrowing no more than 75 to 80 percent of the appraised value of your property. Any excess proceeds remaining after you've paid off an existing mortgage can be used in any way you see fit, but the best use might be to pay off other outstanding high-interest debt, such as credit card debt.

Cash-out refinancing has certain advantages. The interest rate that you'll pay on the mortgage proceeds will usually be less than the interest rate on the other debts (e.g., car loans, personal loans, credit cards, and even some student loans). Moreover, the interest paid on your refinanced mortgage is generally tax deductible, whereas the interest on consumer debt is not.

There are disadvantages to this approach, too. Your refinanced mortgage is secured by a lien on your home. If you can't make the mortgage payments, the lender can foreclose on your home and sell it to pay the mortgage. Credit card or automobile lenders can't take your house away in this fashion. Moreover, unless you're well disciplined, you could pay off the high-interest (credit card) debt only to run it up again, further damaging your financial position.

If you're going to explore a cash-out refinancing, do it only if all of the following are true:

• Your savings make the refinancing worthwhile, even if it wouldn't give you the chance to repay other debt
• Your savings are "real," due to a lower interest rate or a shorter loan term, and not due solely to tax factors, since tax laws may change
• You're sure that you can afford the new monthly mortgage payment
• You trust yourself (and your spouse) not to run up the repaid debt again

Even if the rate on a new mortgage would be only slightly lower that what you've got now, refinancing is a good idea if your savings will outweigh the costs of refinancing during the time you own the home. If you're unsure how much longer you might live in a particular locale, use recouping your refinancing costs in five years or less as a good rule of thumb.

Home loan - mortgage refinancing : A wise action?

When your home-loan has reach around 5 to 10 years, you might be thinking to re-finance your home mortgage to get the extra money for let say, home renovation, or other property investment, or home decoration, mutual trust or even play with stock market. Another benefit is that If you obtain a lower interest rate on your new loan than you had on your old one, you'll be saving money.

The question is that when is the most suitable time to refinance your mortgage? Generally, there are two good times when it's wise to refinance your mortgage. If you've got an adjustable rate mortgage, one of those times is during periods of rising interest rates. If you refinance to a fixed rate mortgage, particularly to a rate similar to your present low adjustable rate, you'll avoid the higher costs when the adjustable rates start going up.

The other time it's a good idea to refinance is when you'll save money by getting a lower interest rate. In this case, you'll want to make sure that your monthly savings will pay back your refinancing costs while you're still living on the property. If you sell your home before your refinancing has paid for itself, you won't be saving anything.

If you are experiencing cash flow difficulties, you may be tempted to lower your monthly mortgage payments by refinancing to extend the term of the loan. From a savings perspective, this is not a good reason to refinance. Unless you get a lower interest rate on the new loan as part of the bargain, you're not really saving any money; in fact, the reverse will be true. If you extend the term of your mortgage without changing anything else, you might loosen your tight cash flow situation, but you'll actually pay more total interest on the mortgage in the long run.