Judd's husband loses leg

Judd and husband "Cactus" Moser were riding together on separate bikes when he crashedMoser's "left leg was severed at the scene of the accident," Judd's publicist saysMoser is the drummer in her bandThe couple married on her Tennessee farm on June 10

(CNN) -- Country music star Wynonna Judd's new husband lost his left leg in a motorcycle crash in South Dakota Saturday, a statement from her publicist said Monday.

The accident happened as Judd, 48, and Michael Scott "Cactus" Moser went for a ride together on separate bikes before her scheduled concert in Deadwood, South Dakota, the publicist said.

"Moser's left leg was severed at the scene of the accident and doctors in Rapid City, South Dakota, amputated the leg above the knee," the statement said. "He has also undergone surgery to his hand."

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"Moser collided with an oncoming vehicle and was transported to a local hospital," the statement said. "He is being treated for serious but non-life-threatening injuries. Wynonna was not involved in the accident."

Judd has postponed next week's concerts in Canada to stay by the side of her husband.

"The outpouring of prayer and support from friends, family and fans has been a blessing to both Cactus and I," Judd said. "Cactus is a champion. I love him deeply and I will not leave his side."

How Wynonna Judd survived the ultimate betrayal

Previously on CNN.com: Wynonna and Cactus get engaged

CNN's Denise Quan and Ric Ward contributed to this report.

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AIG loses bid to move $10 billion fraud case vs BofA (Reuters)

(Reuters) – A federal judge has rejected American International Group Inc's request to move its $10 billion mortgage fraud lawsuit against Bank of America Corp back to a New York state court, where it was originally filed, from federal court.

U.S. District Judge Barbara Jones accepted Bank of America's argument that some of the home loans underlying the 349 residential mortgage-backed securities that AIG said it bought entitled a federal court to assert jurisdiction.

(Reporting by Jonathan Stempel in New York, editing by Gerald E. McCormick)

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Fear over debt fight hits Wall St.; Dow loses 198 (AP)

Anxiety about a deadline to raise the nation's debt ceiling swept across Wall Street on Wednesday and drove the Dow Jones industrial average down almost 200 points. With Washington showing no sign it will find a solution, financial planners around the country said their clients were increasingly worried.

The Dow took a sharp drop during the last two hours of trading and closed down for the fourth session in a row. The declines have grown each day. The market turmoil was a sign that consequences of the debt fight were beginning to materialize in earnest.

With six days to go until the Treasury Department's Tuesday deadline — raise the national borrowing limit or face an unprecedented federal default and unpredictable fallout in the economy — analysts suggested the market would only grow more volatile.

"The longer we go without any type of hope or concrete plans for resolution, the more concerned investors are going to become," said Channing Smith, a managing director at the financial firm Capital Advisors Inc.

While no one was panicking, financial professionals who handle the investment accounts of everyday Americans — college funds, retirement accounts and other nest-eggs — said their customers were growing more worried by the day. One said he had not seen this level of anxiety since the 2008 financial crisis.

"We're getting a ton of calls," said Bob Glovsky, president of Mintz Levin Financial Advisors in Boston. "It's all `What happens if the U.S. defaults? What's going to happen to me?'"

The Dow finished the day down 198.75 points, at 12,302.55. About half of the decline came between 2 and 4 p.m., when the market closes for the day. It was the worst fall for the Dow since June 1, with 28 of the 30 component stocks losing value.

While the decline was not close to the stomach-churning days of the fall of 2008, when the Dow lurched lower and higher by 700 points some days, there were signs that fear on Wall Street was growing. The Dow fell 43 points Friday, 88 points Monday and 91 points Tuesday, then more than twice that on Wednesday.

"Right now the clouds are gathering," said Chris Long, a financial planner in Chicago.

Without a deal by Tuesday, the Obama administration has said the government will be unable to pay all its bills, and could miss checks to Social Security recipients, veterans and others who depend on public help. In addition, credit rating agencies could downgrade their assessment of the government's finances, further unnerving financial markets and perhaps causing interest rates to rise for everyone.

Already, some investors are taking precautions. Richard Shortt, 66, of Somerville, Mass., worries that a default, or even just a downgrade of U.S. debt, could cause bond and stock markets to tumble. Last week he sold about 10 percent of his stock holdings and put the proceeds into a money-market mutual fund.

"It might just be a short-term decline in the markets, but it could last a week or two while this gets resolved," said Shortt, a semi-retired small business consultant. "If we do get any sort of debt downgrade, even if we avoid a default, that will change the game a bit."

Financial advisers typically tell their clients not to tinker with their portfolios or try to play a short-term move in the market to their advantage. Of course, leaving investments alone could be a test of patience for the rest of this week.

On Friday afternoon, for example, it's plausible that Congress could reach a deal in mid-afternoon and send the Dow soaring 300 points in the final hour of trading. It's also plausible that there's still no deal and traders decide staying in the market over the weekend is too risky, and send the Dow plunging.

Investors who rode out the financial turbulence in 2008 without rejiggering their portfolios have made up most of their losses. The stock market has almost doubled since its post-meltdown low in March 2009. Many people who withdrew their money from the stock market during the worst haven't come close to breaking even.

"Trying to adjust to something on a day-to-day basis is how you get hurt," Glovsky said. "You've got to take a long-term approach."

The memory of the fall of 2008 remains vivid. The Dow plunged 778 points in a single day when Congress surprised investors by rejecting an early version of $700 billion legislation to bail out the nation's biggest banks.

"We've been through this, or something like it," said Leisa Aiken, a financial planner in Chicago. "I think what we went through in 2008 has toughened clients up a little. They realize that they will get through it if they don't give in to a knee-jerk reaction."

This time around, analysts say, the chances of similar turmoil are small but growing. Standard & Poor's, one of the rating services, has said that "the reverberations of the showdown may be deep and wide — particularly if Washington does not come to a timely agreement on the debt ceiling."

Bond traders were still betting on a last-minute deal on the debt. The yield on the 10-year Treasury note, which should rise when investors believe there is a greater risk they won't get their money back, has stayed near 3 percent all month.

Even if Washington sails past the deadline without raising the debt limit, bond traders believe the Obama administration will keep up its interest payments and cut spending on everything else. The resulting shock to the economy and other financial markets would make Treasury bonds a safe place for investors to hide, which could result in lower yields.

For individual investors, experts are cautioning against overreaction.

Financial planner Jim Pearman, a principal in Partners in Financial Planning in Roanoke, Va., said he was telling clients his firm isn't changing its investments based on a "game of chicken" in Congress.

"You have to make two decisions right when you try to time this thing. One is when you get out, and the other is when you get back in," he said. "It's hard to make that. We don't try."

One measure of investor concern, the Vix, or volatility index, shot up 14 percent on Wednesday. The tone of the market changed this week, as nervous investors began moving money out of stocks, said Howard Ward, a chief investment officer at asset manager GAMCO.

He said the stock market will likely become more volatile as the weekend nears, and while he said he was not repositioning his portfolio, he admitted: "Right now I'm pretty worried."

___

AP Business Writers Chip Cutter, Matthew Craft and David K. Randall in New York and AP Personal Finance Writer Mark Jewell in Boston contributed to this report.

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BofA loses bid to end HAMP mortgage lawsuit (Reuters)

NEW YORK (Reuters) – Bank of America Corp lost its bid to dismiss a lawsuit accusing it of reneging on promises to help borrowers modify their mortgage loans under a much-criticized federal program.

The bank, however, claimed a partial victory, citing District Judge Rya Zobel's decision to dismiss claims by borrowers who sought to participate in the two-year-old Home Affordable Modification Program, or HAMP.

Zobel nonetheless ruled that homeowners who contend they did not get modifications for which they qualified under HAMP, to avoid foreclosures, could pursue claims against Bank of America.

The complaint "meticulously" detailed each of these plaintiffs' compliance with loan modification conditions, but said the bank "willfully failed" to modify the loans, either in bad faith or for its own economic benefit, Zobel wrote. Such allegations are "sufficient" to let the lawsuit go forward, she added.

Zobel rejected claims by borrowers who claimed they were "intended beneficiaries" of HAMP but never entered the program, saying they had no contractual right to relief.

She also rejected a request to block Bank of America while the lawsuit is pending from foreclosing on 37 borrowers said to be in "imminent danger" of losing their homes.

In a statement, Bank of America spokeswoman Shirley Norton said the company is pleased that four of the eight counts in the complaint were dismissed.

The lawsuit combines 26 cases that had been brought in 19 states, and sought class-action status for various plaintiffs.

"The Court's conclusions will likely help hundreds of thousands of families to convert temporary mortgage modification plans into permanently lower monthly payments. Tens of thousands of foreclosures are likely to be prevented," said Gary Klein, a lawyer for the plaintiffs, adding that he expects the case to get class certification quickly.

Last week, Bank of America said it would take $20 billion of charges for various mortgage matters, including over its 2008 purchase of Countrywide Financial Corp.

Like several rivals, the Charlotte, North Carolina-based bank has also been in talks with state and federal regulators to resolve claims over alleged foreclosure abuses.

HAMP was created in 2009 as a centerpiece of efforts by the Obama administration to boost the nation's housing sector.

While it provides incentives to loan servicers to encourage modifications, HAMP has been widely derided as ineffective.

Through May, 731,451 borrowers had received permanent loan modifications, far below the original goal of 3 million to 4 million.

The Republican-controlled House of Representatives voted in March to wind down the program, though the Democrat-controlled Senate is not expected to follow.

Bank of America, JPMorgan Chase and Wells Fargo & Co are the largest servicers participating in HAMP.

The case is In re: Bank of America Home Affordable Modification Program (HAMP) Contract Litigation, U.S. District Court, District of Massachusetts, No. 10-md-02193.

(Reporting by Jonathan Stempel; editing by Carol Bishopric)

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Morgan Stanley loses bid to toss MBIA lawsuit (Reuters)

CHICAGO (Reuters) – A New York judge rejected Morgan Stanley's (MS.N) bid to throw out a lawsuit accusing the bank of fraudulently inducing bond insurer MBIA Inc (MBI.N) to insure $223.2 million of risky mortgage debt.

MBIA filed the lawsuit in December accusing Morgan Stanley and its Saxon Mortgage Services Inc unit of making false representations about the quality of the underwriting on a pool of 4,979 second-lien residential mortgages.

MBIA said it found breaches in 97 percent of the loan files it examined, and expected to be responsible for much more than the $71 million of claims for which it had already paid out.

In a ruling Thursday, New York State Supreme Court Justice Gerald Loehr threw out MBIA's unjust-enrichment claim against Saxon but refused to dismiss claims alleging fraudulent inducement, breach of contract and punitive damages.

He said it was premature to accept Morgan Stanley's argument that MBIA's losses were a result of the nation's housing slump, which caused higher loan delinquencies.

Morgan Stanley "had unique and special knowledge regarding the mortgage loans, particularly the quality of the underwriting," Loehr wrote. "It cannot be said that MBIA's reliance on the defendant's representations was unreasonable."

Mary Claire Delaney, a Morgan Stanley spokeswoman, declined to comment. MBIA is based in Armonk, located in New York's Westchester County, where Justice Loehr sits.

MBIA, once the largest municipal bond insurer, piled up big losses by insuring mortgages and other debt that proved toxic. It and other investors have sued a large number of banks to recover losses on billions of dollars of toxic loans.

Morgan Stanley is among roughly a dozen banks challenging the 2009 restructuring of MBIA that was overseen by New York's insurance superintendent. The banks say the restructuring left MBIA's insurance unit undercapitalized and unable to pay out on their claims.

New York's highest court, the Court of Appeals, is scheduled to consider the banks' arguments on May 31.

In morning trading, Morgan Stanley shares were up 25 cents at $23.80, and MBIA shares were down 14 cents at $9.06.

The case is MBIA Insurance Corp. v. Morgan Stanley et al, New York State Supreme Court, Westchester County, No. 29951/2010.

(Reporting by Jonathan Stempel; editing by John Wallace)

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Freddie Mac loses $929 million (Reuters)

By Corbett B. Daly Corbett B. Daly – Wed May 4, 5:56 pm ET

WASHINGTON (Reuters) – Mortgage finance giant Freddie Mac (FMCC.OB) on Wednesday said it lost just short of a billion dollars last quarter, though it did not ask taxpayers for more aid as the loss stemmed from interest payments to the government.

The second-largest U.S. residential mortgage funds provider reported net loss attributable to common shareholders of $929 million in the first quarter, including a $1.6 billion payment to the government. Without that interest payment, Freddie Mac earned about $676 million in the first three months of the year.

That's the first three month period since the second quarter of 2009 that the firm reported positive net income, excluding the interest payment, and stems from higher quality loans made in recent years.

The first-quarter loss, including the interest payment, represents about $0.29 per share.

Freddie Mac and its sister firm Fannie Mae (FNMA.OB) have taken more than $150 billion in taxpayer aid since they were seized by the government in late 2008.

Interest repayments to Treasury from the two firms have reduced their net taxpayer assistance to slightly more than $134 billion.

Freddie Mac said those interest payments would increasingly drive any need for future taxpayer assistance.

Asked if the government should rethink its requirement that it should have to pay 10 percent interest on its government aid, Freddie Mac chief financial officer Ross Kari told Reuters it is the cost of doing business.

"What we think doesn't matter," Kari said. The firms are effectively controlled by the Federal Housing Finance Agency.

Then-U.S. Treasury Secretary Henry Paulson took control of Freddie Mac and Fannie Mae at the height of the financial crisis in September 2008 as losses mounted from mortgages gone bad.

The plan to put them into conservatorship was meant to be temporary, although it is likely to be years before a long-term replacement structure takes shape.

The two firms and the Federal Housing Administration back close to nine of ten new home loans now as private mortgage funding dried up in the wake of the financial crisis.

(Reporting Corbett B. Daly and Al Yoon in New York; Editing by Diane Craft and Andrew Hay)

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JPMorgan loses court ruling over loan putbacks (Reuters)

NEW YORK (Reuters) – JPMorgan Chase & Co (JPM.N) could be forced to repurchase thousands of home equity loans, after a judge ruled in favor of a bond insurer that argued it could build its case based on a sampling of loans.

The ruling against EMC Mortgage Corp, once a unit of Bear Stearns Cos, comes amid many lawsuits seeking to force banks to buy back tens of billions of dollars of mortgage and other home loans that went sour. JPMorgan bought Bear Stearns in 2008.

Syncora Guarantee Inc now can pursue claims concerning the entire 9,871-loan pool that backed a securities issue, according to the ruling late Friday from U.S. District Judge Paul Crotty in Manhattan.

The ruling lowers the hurdle for insurers trying to prove they were deceived by banks, and increases the potential that banks could be forced to buy back more loans.

Crotty rejected EMC's claim that Syncora be forced to show breaches related to individual loans.

Syncora had insured the interest and principal payments on part of a $666 million mortgage bond backed by the loans.

EMC is reviewing the ruling, said John Callagy, a lawyer for the company. A lawyer for Syncora, Philip Forlenza, declined to comment.

Syncora said it was misled before agreeing to insure investors who bought pieces of the bond, which was created in March 2007 by EMC and backed by the 9,871 home loans.

Once known as XL Capital Assurance Inc, Syncora contended that EMC breached its representations on 85 percent of the loan pool, based on a random sample of about 400 loans.

It said this prevented it from evaluating how risky it would be to insure the securities.

Crotty concluded that Syncora has "especially broad" rights because "it bears the greatest loss if the loans underperform and the other parties break their contractual obligations."

The judge also chided EMC for the speed with which it appeared to fix problem loans. He said EMC had remedied only 20 of the 1,300 loans Syncora had submitted for repurchase.

"EMC cannot reasonably expect the court to examine each of the 9,871 transactions to determine whether there has been a breach, with the sole remedy of putting them back one by one," Crotty wrote in a footnote.

The case is Syncora Guarantee Inc v. EMC Mortgage Corp, U.S. District Court, Southern District of New York, No. 09-3106.

(Reporting by Jonathan Stempel and Clare Baldwin, editing by Gerald E. McCormick)

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JPMorgan loses court ruling over loan putbacks (Reuters)

NEW YORK (Reuters) – JPMorgan Chase & Co (JPM.N) could be forced to repurchase thousands of home equity loans, after a judge ruled in favor of a bond insurer that argued it could build its case based on a sampling of loans.

The ruling against EMC Mortgage Corp, once a unit of Bear Stearns Cos, comes amid many lawsuits seeking to force banks to buy back tens of billions of dollars of mortgage and other home loans that went sour. JPMorgan bought Bear Stearns in 2008.

Syncora Guarantee Inc now can pursue claims concerning the entire 9,871-loan pool that backed a securities issue, according to the ruling late Friday from U.S. District Judge Paul Crotty in Manhattan.

The ruling lowers the hurdle for insurers trying to prove they were deceived by banks, and increases the potential that banks could be forced to buy back more loans.

Crotty rejected EMC's claim that Syncora be forced to show breaches related to individual loans.

Syncora had insured the interest and principal payments on part of a $666 million mortgage bond backed by the loans.

EMC is reviewing the ruling, said John Callagy, a lawyer for the company. A lawyer for Syncora, Philip Forlenza, declined to comment.

Syncora said it was misled before agreeing to insure investors who bought pieces of the bond, which was created in March 2007 by EMC and backed by the 9,871 home loans.

Once known as XL Capital Assurance Inc, Syncora contended that EMC breached its representations on 85 percent of the loan pool, based on a random sample of about 400 loans.

It said this prevented it from evaluating how risky it would be to insure the securities.

Crotty concluded that Syncora has "especially broad" rights because "it bears the greatest loss if the loans underperform and the other parties break their contractual obligations."

The judge also chided EMC for the speed with which it appeared to fix problem loans. He said EMC had remedied only 20 of the 1,300 loans Syncora had submitted for repurchase.

"EMC cannot reasonably expect the court to examine each of the 9,871 transactions to determine whether there has been a breach, with the sole remedy of putting them back one by one," Crotty wrote in a footnote.

The case is Syncora Guarantee Inc v. EMC Mortgage Corp, U.S. District Court, Southern District of New York, No. 09-3106.

(Reporting by Jonathan Stempel and Clare Baldwin, editing by Gerald E. McCormick)

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