Major banks close to big settlement on home loans

U.S. regulators are close to securing another multibillion-dollar settlement with the largest banks to resolve allegations that they unlawfully cut corners when foreclosing on delinquent borrowers, a source familiar with the talks said.
The settlement with five big banks would be part of a larger deal that the Office of the Comptroller of the Currency hopes will include 14 banks and total about $10 billion, the source said.
Such a settlement would address an outstanding issue that was left unsettled after the $25 billion deal that the banks reached in February with the Justice Department, housing authorities, and state attorneys general.
In 2011, the OCC had separately required the big banks to "look back" and compensate borrowers wrongfully foreclosed upon in 2009 and 2010. It appears that the case-by-case analysis is proving too cumbersome, and the banks are instead opting for a lump-sum settlement.
The top five mortgage lenders -- Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup Inc and Ally Financial Inc -- may reach a deal in the coming days, the source said.
The largest banks would pay the majority of the $10 billion target. That money would be paid out to a group of borrowers foreclosed upon during the period of time covered by the review, said the source, who was not authorized to speak publicly.
The OCC and the banks are still negotiating how to calculate individual payouts, the source said, adding that regulators will give the banks credit for compensation they have already given borrowers as part of ongoing foreclosure reviews.
The New York Times first reported the pending deal.
"The Office of the Comptroller of the Currency is committed to ensuring the Independent Foreclosure Review proceeds efficiently and to ensuring harmed borrowers are compensated as quickly as possible," the OCC said in a statement.
Ally, Wells Fargo, JPMorgan, Bank of America and Citigroup declined to comment.

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Oil rises as 'cliff' consensus appears close

 Oil prices rose Monday as U.S. political leaders moved toward averting the "fiscal cliff" just hours before the deadline.
President Barack Obama said Monday afternoon that a deal to avert the cliff — a series of automatic tax increases and spending cuts set to take effect starting Tuesday — was in sight but not yet finalized.
Republicans and Democrats are still at an impasse over whether to put off across-the-board spending cuts and, if so, how to pay for that. There's a midnight deadline to reach a deal.
Benchmark U.S. crude rose $1.02 to finish at $91.82 per barrel in New York. Oil has wavered in recent weeks along with the ups and downs of the budget negotiations. The price of oil finished December up about 3 percent from the start of the month. It ranged from a low near $77 a barrel to high around $110 a barrel during the year.
Brent crude, used to price international varieties of oil, rose 49 cents to end at $111.11 a barrel.
The national average for gasoline was at $3.29 per gallon Monday, well under the average of nearly $3.40 a month ago but 2 cents higher than a year ago.
In other energy futures trading:
Natural gas fell 12 cents, or 3.4 percent, to finish at $3.35 per 1,000 cubic feet.
Wholesale gasoline rose 1 cent to $2.81 a gallon.
Heating oil was flat at $3.05 a gallon.

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Wall Street ends 2012 riding high on "cliff" deal optimism

 U.S. stocks closed out 2012 with their strongest day in more than a month, putting the S&P 500 up 13.4 percent for the year, as lawmakers in Washington closed in on a resolution to the "fiscal cliff" negotiations.
The S&P 500's gain for the year marks its best performance since 2009, as stocks navigated through debt crises in Europe and the United States that dominated the headlines. Still, with numerous issues involving budget talks unresolved, markets could still be open to a shock should the deal break down unexpectedly.
Fittingly, in the last session of the year, stocks bounced back and forth on the headlines out of Washington, as both President Barack Obama and Republican Senate leader Mitch McConnell issued statements indicating a deal to avert the cliff was close.
"The worst news could have been the president coming out and saying, 'We don't have a deal and we've giving up,' and he didn't say that," said Ron Florance, managing director of investment strategy for Wells Fargo Private Bank, based in Scottsdale, Arizona.
"My personal skepticism, I don't trust anything out of Washington until it is signed, sealed and delivered, and it is not signed, sealed and delivered."
While a deal on the cliff is not yet official, investors may be ready to take on more risk next year in hopes of a greater reward.
McConnell said an agreement had been reached with Democrats on all of the tax issues in the potential deal, removing a large hurdle in the talks. An agreement is needed in order to avert a combination of tax hikes and spending cuts that many believe could push the U.S. economy into recession.
A source familiar with the matter said an emerging deal, if adopted by Congress and President Barack Obama, would raise $600 billion in revenue over the next 10 years by increasing tax rates for individuals making more than $400,000 and households earning above $450,000 annually.
Despite the uncertainty, the market encountered only occasional bouts of volatility this year. For the first time since 2006, the CBOE Volatility Index or VIX <.vix>, the market's favored indicator of anxiety, did not surpass the 30 level, a threshold that usually signals heightened worry among investors.
"Given all the threats in 2012, the VIX was relatively tranquil," said Bill Luby, the author of the VIX and More blog in San Francisco, citing the crises in Spain and Greece, along with constant intervention from the Federal Reserve.
The Dow Jones industrial average <.dji> gained 166.03 points, or 1.28 percent, to end at 13,104.14. The Standard & Poor's 500 Index <.spx> gained 23.76 points, or 1.69 percent, to finish at 1,426.19. The Nasdaq Composite Index <.ixic> gained 59.20 points, or 2.00 percent, to close at 3,019.51.
Monday's gains enabled the S&P 500 to snap a five-day losing streak, its longest skid since September.
The S&P 500 closed out 2012 with a 13.4 percent gain for the year, compared with a flat performance in 2011. The Dow rose 7.3 percent in 2012 and the Nasdaq climbed 15.9 percent.
Financials <.gspf> were the strongest of the S&P's 10 industry sectors this year, gaining more than 26 percent, led by Bank of America , which more than doubled in 2012, and was the best performer of the Dow industrials.
Of the S&P's 10 sectors, only defensively oriented utilities <.gspu> ended the year lower, falling 2.9 percent.
Gains in Apple Inc , the most valuable U.S. company, helped lift the Nasdaq. The stock rose 4.4 percent to $532.17, lifting the S&P information technology sector index <.gspt> up 2.2 percent. For the year, Apple rose 31.4 percent, ending with a market value of about $501.4 billion.
Each of the Dow's 30 components finished the session in positive territory, led by a 3.2 percent climb in Caterpillar Inc to $89.58.
Volume was modest, with about 6.06 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, slightly below the daily average of 6.42 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 6 to 1, while on the Nasdaq, four stocks rose for every one that fell.

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Stocks shoot up as investors bet on 'cliff' deal

The stock market shot higher on Monday even as the "fiscal cliff" neared. By the time trading ended, Republicans and Democrats still hadn't reached a budget compromise — but investors were betting that they would.
It was a dramatic day on what turned out to be a strong year for stocks. The Standard & Poor's 500 index rose 13.4 percent for the year, after finishing flat in 2011. It was the index's best year since 2009, and it came despite overhanging problems like Europe's debt crisis and anemic U.S. growth, bringing U.S. indexes close to their highs reached before the 2008 financial crisis.
Including dividends, the gain for the S&P 500 was even higher — 16 percent.
The close Monday was a high note in what had been a choppy day for the market, as choppy as the "fiscal cliff" deal-making that has been yanking it around. It also marked a turnaround after five straight days of "cliff"-influenced losses. The Dow Jones industrial average and the Standard & Poor's 500 both climbed more than 1 percent. The Nasdaq composite index rose 2 percent.
Stocks fell at the opening of trading Monday and struggled for direction throughout the morning. The indecisiveness overlaid a day of dramatic budget negotiations in Washington, where lawmakers were trying to hammer out a new budget deal to avert the "fiscal cliff." That refers to automatic tax increases and government spending cuts that will kick in without a budget deal.
Stocks jerked higher at midday following reports that the bare outline of a deal to avoid the "cliff" had been knit together. The gains faded after President Barack Obama said in the early afternoon that a compromise was "within sight," but not finalized. Then, in the late afternoon, the indexes shot higher again. Congressional Republicans and the Democratic White House said they had agreed on some measures, but still had no final deal in hand.
At the close of trading, Dow Jones industrial average was up 166.03 points, finishing the year at 13,104.14. That's a gain of 7.3 percent for the year, its fourth straight year of gains.
The S&P 500 rose 23.76 to 1,426.19. The Nasdaq composite climbed 59.20 to 3,019.51. For the year the Nasdaq rose 15.9 percent.
With the "fiscal cliff" still closing in, investors' opinions about its potential impact varied, making its long-term effect on the market hard to guess.
Some investors are unruffled. They think that even if the U.S. does go over the "cliff," it would be more akin to the anti-climactic Y2K scare than a true Armageddon. The "cliff's" impact would be felt only gradually, they reason. For example, workers might get more taxes withheld from their first couple of paychecks in the new year, but it's not as if they'd have to pay all their higher taxes up front on Tuesday. And Congress could always retroactively repeal those higher taxes.
Others are more concerned. The higher taxes and lower government spending could take more than $600 billion out of the U.S. economy and send it back into recession. Investors would have no good read on the country's long-term policy for taxes and spending.
The psychological impact — the U.S. would essentially be broadcasting that its lawmakers can't compromise — would also hurt.
"We're having a fragile recovery, with the pain of 2008 still fresh on everybody's mind," said Joe Heider, principal at Rehmann Group outside Cleveland. "It's fear of the unknown. And fear is one of the greatest drivers of the financial markets."
Tim Speiss, partner in charge of the personal wealth advisers practice at EisnerAmper in New York, followed the "cliff" negotiations on Monday and wondered if the U.S. would get its debt rating cut again. The Standard & Poor's ratings agency cut its rating of the U.S. government amid similar negotiations in August 2011, when lawmakers were arguing over the government's borrowing limit. S&P said at the time that the "political brinksmanship" highlighted how "America's governance and policymaking (is) becoming less stable, less effective, and less predictable." Its rating cut sent the stock market into a tailspin.
The other major ratings agencies, Moody's and Fitch, have suggested that they might lower their ratings of the U.S. because of the "fiscal cliff."
"That is, unfortunately, the big story," Speiss said.
It's also one of the only stories. There's been little other news to trade on during the holiday season, giving the "fiscal cliff" drama outsized influence. No major companies are scheduled to report earnings this week. The most significant economic indicator scheduled for this week, the government's monthly jobs report, won't be released until Friday.
The yield on the benchmark 10-year Treasury note rose to 1.76 percent from 1.70 percent late Friday, a sign that investors were moving money into stocks.
Some of the best-performing stocks for the year were those that were making up for deep losses in 2011. Homebuilder PulteGroup nearly tripled after falling for five of the previous six years. Appliance maker Whirlpool and Bank of America more than doubled over the year, after falling by double-digit percentages in 2011.
Some of the worst performers of 2012 were Best Buy, Hewlett-Packard and J.C. Penney. All are struggling to keep up with competitors who have adapted more quickly to changing technologies and customer tastes. They were all up for the day, but were all down at least 44 percent for the year.

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Minimum wage gap grows wider between states

With a bump in the Washington state minimum wage to $9.19 an hour, high school student Miranda Olson will edge closer to her goal of buying the black Volkswagen Beetle she's been researching online.
Olson is only able to pick up part-time hours working at a cafe after classes and on weekends. But the extra pennies she'll earn in 2013 will add up over the coming weeks and months.
"It's not much, but it's something," said Olson, 16, who works at Wagner's European Bakery and Cafe in Olympia. "Every bit helps."
Many workers around the country won't be as lucky as residents of Washington state, which is raising its minimum wage Tuesday by 15 cents an hour even though it already has the highest state baseline in the country.
Minimum-wage workers in Idaho will make nearly $2 an hour less in 2013 than their counterparts living just one state to the west.
Automatic increases designed to compensate for inflation have steadily pushed up wages in some states, even through the recession, expanding the pay gap between areas that make annual adjustments and those that don't. Of the 10 states that will increase the minimum wage Tuesday, nine did so automatically to adjust for inflation.
Rhode Island lawmakers approved that state's wage increase in the past year.
Paul Sonn, legal co-director at the National Employment Law Project, said he hopes more states will start looking at automatic adjustments as the economy recovers. He said the model — which Washington state adopted in 1998 — helps avoid sudden jolts as states try to catch up with each other.
"We think there's a case that it's better for everyone, including the business community, to have predictable, regular, small increases every year," Sonn said.
The automatic adjustments aren't much. Washington's bump will mean those who work 40-hour weeks will earn an extra $6 a week — enough for a couple lattes — or about $300 a year.
Hundreds of thousands of workers are expected to get a pay increase with the wage adjustments that begin New Year's Day. Along with Washington and Rhode Island, the changes will occur in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon and Vermont.
Among the nine states with automatic adjustments, the average minimum wage is $8.12 an hour, up from a little under $8. States that do not have automatic changes operate with an average minimum wage of about $7.40 — a difference of about $1,500 a year for a full-time worker.
Many states, including Idaho, follow the federal minimum wage of $7.25 an hour, either because they've tied their minimum wage to that threshold or because the state-enacted minimum is lower than that.
San Francisco has set the highest local minimum wage and will have workers paid at least $10.55 an hour in 2013.
Groups such as the National Restaurant Association oppose further increases in federal or state minimum wages, arguing that it's an ineffective way to reduce poverty and forces business owners to cut hours, raise prices or lay off workers.
At Tom's 1st Avenue Bento, a downtown Portland lunch spot, owner Tom Hume said he boosted pay for minimum-wage workers before the end of the year in order to get ahead of the game. He also raised prices on one-third of his menu items by 25 cents.
Natasha Baker, 22, who works at Hume's restaurant in Portland, recently moved back in with her mother but hopes to move to another apartment in January. She said the extra $5 or $6 she's earning every week with the salary boost is OK but won't make a huge difference.
"I don't usually look at what I get paid," she said. "I'm more directed on what's being taken out, which is more discouraging than anything."
In Montpelier, Vt., restaurant owner Irene Facciolo said she supported the 14-cents-an-hour increase in the minimum wage for her employees. She said the move from $8.46 to $8.60 an hour wasn't much.
"We don't have a problem with it at all," Facciolo said.

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Just got a new iPhone, iPad or Android device for Christmas? Gameloft cuts popular iOS and Android games to 99¢

Smartphones and tablets running Apple’s (AAPL) iOS platform and Google’s (GOOG) Android OS are big this year — so big that traditional toy makers are terrified they might soon be obsolete. If you’re one of the tens of thousands of people young and old who just unwrapped a brand new iPad, Android device, iPod touch or iPhone, Gameloft has made figuring out where to start fairly easy for you by putting dozens of mobile games on sale for just $0.99 each. Popular titles include “Asphalt 7: Heat,” “The Dark Knight Rises,” “The Amazing Spider-Man,” “Where’s Waldo Now?,” “Modern Combat 4: Zero Hour” and more. Dozens of other Gameloft games are free and you can browse through all the company’s titles via the source links below.

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Purported photo of new BlackBerry phone with QWERTY keyboard leaks

Research In Motion (RIMM) CEO Thorsten Heins recently said during the company’s Q3 earnings call that BlackBerry 7 is still a “strong success” in the Asian-Pacific markets. Despite the company putting most of its weight behind BlackBerry 10 and the Z10 and X10, Heins said RIM will continue supporting BB7 and consumers “might expect us to even build one of the other new products” based on it. Heins suggested on the earnings call new BB7 phones will target entry-level markets with lower price points over its BB10 devices; now, MobileSyrup has posted a photo of a mystery BlackBerry phone sitting next to the BB10-powered Z10 and X10. Could this HTC (2498) Status/ChaCha look-alike be a new BB7 smartphone? It could be, but then again, it could also be a prototype that will never be released or another new BB10-powered QWERTY phone.

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Microsoft Surface trampled at the bottom of the tablet pile this Christmas

While it does have drawbacks just like anything else, Microsoft’s (MSFT) Surface is a great slate for those looking for a fresh new take on the modern tablet. Unfortunately, it doesn’t look like very many people were looking for a fresh new take on the modern tablet this holiday season. In a recent note to investors, R.W. Baird analyst William Power recounted recent conversations had at retailers including Best Buy (BBY) and Staples (SPLS). While speaking with sales reps at the stores, Apple’s (AAPL) iPad was the most highly recommended tablet while Amazon’s (AMZN) Kindle Fire line and Samsung’s (005930) Galaxy Tab line were both recommended as alternatives. Microsoft’s Surface tablet, on the other hand, was not pushed by reps at either chain.
[More from BGR: Purported photo of new BlackBerry phone with QWERTY keyboard leaks]
From Power’s note, as picked up by Barron’s:
[More from BGR: Sprint salesman refuses to sell iPhone to customer, says his ‘fingers are too fat’ to use it]
Microsoft’s Surface, which Best Buy just recently started carrying, was not recommended to us by reps without us asking about it specifically. When asked about sales to date, reps noted that the device was new and indicated that early demand has been modest relative to the iPad and Kindle Fire. We would also note that the device was in stock at every store we contacted […] We contacted Staples stores in an effort to further gauge Microsoft Surface sales, though our impression from speaking with reps was tablets are not a major seller at Staples. Tellingly, Staples doesn’t currently carry the iPad. When pressed for details, Staples reps indicated that Surface volumes have been modest to date. Most reps told us that the primary appeal to Surface buyers is the ability to run Microsoft Office. Consistent with our Best Buy checks, the Surface was also in stock at all Staples stores we contacted. Outside of the Surface, the Google Nexus 10 was cited as another strong tablet option.
Further supporting the idea that Microsoft’s debut tablet wasn’t a big seller this holiday season, Twitter user A.X. Ian did a quick analysis of tweets discussing new tablets during a 24-hour period around Christmas Eve.
Based on his data, 1,795 people tweeted about getting a new iPad during that time span while 250 tweeted about their new Kindle Fires, 100 mentioned their new Nexus 10 tablets and just 36 tweets were posted by users who had received a new Surface.

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iPad is a Christmas graveyard for ‘Grand Theft Auto’ and ‘Modern Combat’

At the beginning of December, the traditional video game industry attempted another iPad invasion. New versions of “Grand Theft Auto,” “Modern Combat” and “Baldur’s Gate” hit the iOS app market priced between $5 and $10. Over the past years, we have seen repeated attempts by major console and PC industry franchises to tailor their blockbuster games for iPhone and iPad platforms. None have succeeded. As the iOS app market increasingly favors free games with in-app purchases, the old-timers have started failing spectacularly.
[More from BGR: Microsoft Surface trampled at the bottom of the tablet pile this Christmas]
December is the most important month of the year for the iOS app market and the days around Christmas are the hottest period. As consumers upgrade their iPhones or receive their very first iOS devices, they tend to go on mobile app buying binges. That is why mega franchises like GTA and “Modern Combat” launched their latest iOS products at the beginning of the month. The games were supposed to stay alive for at least three weeks. They did not.
[More from BGR: Mark Cuban: Nokia Lumia 920 ‘crushes’ the iPhone 5]
The lavishly marketed “Grand Theft Auto: Vice City” peaked on iPhone app chart at No.2 on December 8th and plunged to No.36 by December 22nd. It rebounded to No.25 on December 25th. On the iPad, the game plummeted to a shocking No.52 by the all-important Christmas Day, when new iPad owners go berserk on iTunes.
Here is the kicker: on the revenue chart for U.S. iPad apps, the new GTA game had tanked to No.75 by December 25th. This is even worse than the No.52 position on the download chart. I find that genuinely fascinating, because it means that a game with a very stiff download price of $5 is showing weaker revenue performance than on raw download volume.
The GTA title is priced at $5 at a time when 80% of the top-grossing iPad games are free downloads. The top free apps have compelling in-game purchase strategies — “Grand Theft Auto: Vice City” does not. As a result, it is getting beaten by titles such as “Fairway Solitaire” and “My Little Pony” in revenue generation. Having massive name recognition and hundreds of millions of units in console game sales helps very little in the brutally competitive iOS game market.
“Modern Combat 4″ has also plunged out of top-50 on the iPad revenue chart just three weeks after its high-profile debut. The $10 update of “Baldur’s Gate” is out of top-200, brought low by its ridiculously high sticker price.
The proud console and PC game champions keep repeating the same gambit in the iOS market: price ‘em high and ignore the in-app purchase angle. They keep failing. When are we going to see a major console game franchise finally adapt to the Apple (AAPL) ecosystem and create an iOS game that is free to download but lures users into an in-app purchase trap effectively?

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Apple still can’t build enough iPad minis

A common issue often presents itself when Apple (AAPL) launches new products: it can’t build them fast enough. We’ve seen it time and time again, most recently when Apple launched the iPhone 5 and 150,000 dedicated factory workers still couldn’t keep up with demand. Now, a report has surfaced claiming that Apple’s manufacturing partners in the Far East can’t build units fast enough to keep pace with Apple’s iPad mini orders.
[More from BGR: Microsoft Surface trampled at the bottom of the tablet pile this Christmas]
According to Digitimes’ supply chain sources, Apple’s parts suppliers have prepared enough components to build between 10 million and 12 million iPad mini tablets in the fourth quarter to accomodate heavy demand. Apple’s manufacturing partners are only expected to ship 8 million assembled units, however.
[More from BGR: Mark Cuban: Nokia Lumia 920 ‘crushes’ the iPhone 5]
The report states that yield rates are improving though, and Apple is expected to ship 13 million iPad mini tablets in the first quarter of 2013.

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