Firm to exit wholesale mortgage business

September 18, 2007

E-Trade Financial Corp. slashed forecasts for 2007 profit as the discount brokerage exited the wholesale mortgage business because of a slew of bad home loans. The New York company, which in recent years relied heavily on mortgage lending to power earnings, warned an already jittery Wall Street that it is not immune to the tightening of global credit markets. E-Trade pinned the troubles to its $30 billion home loan portfolio on "significant deterioration in the mortgage market in August." It set aside $245 million for bad loans during the second half, up from about $55 million during the first half of the year. (AP)

The New York Times will stop charging for access to parts of its website, effective at midnight tonight, reflecting a growing view in the industry that subscription fees cannot outweigh the potential advertising revenue from increased traffic on a free site. The move comes two years to the day after the Times began the subscription program, TimesSelect, which has charged $49.95 a year, or $7.95 a month, for online access to the work of its columnists and to its archives. TimesSelect has been free to print subscribers to the Times and to some students and educators. In addition to opening the entire site to all readers, The Times will make available its archives from 1987 to the present without charge, plus those from 1851 to 1922, which are in the public domain. There will be charges for some but not all material from 1923 to 1986. The New York Times Co. is the parent of The New York Times and The Boston Globe. (New York Times News Service)

The Internal Revenue Service has added a new section to its website to answer tax questions for those losing their homes due to foreclosures. The section on IRS.gov includes a worksheet to help homeowners determine whether they are eligible for any foreclosure-related tax relief. For those who find they owe additional tax, it includes a form for requesting a payment agreement with the IRS. (AP)

The Securities and Exchange Commission needs to tighten its procedures for managing its caseload of enforcement investigations, congressional investigators have concluded in a report. In addition, the SEC should be faster at returning to aggrieved investors' money that it recovers in settlements with companies, according to a report by the Government Accountability Office, Congress's investigative arm. Of $8.4 billion ordered to be returned to investors since the program's start in 2002, about $1.8 billion had been distributed as of June, the GAO report said. (AP)

A genetic test developed by Nanosphere Inc. of Northbrook, Ill., that can reveal which patients are especially sensitive to the blood thinner warfarin won federal approval. Such screenings could prevent thousands of complications each year, health officials estimate. The approval of the test comes a month after warfarin, sold under the brand name Coumadin and in generic forms, became the first widely used drug to include genetic testing information on its label. An estimated one-third of patients process the drug differently than do most others, exposing them to a higher risk of bleeding. (AP)

A trademark lawsuit by tennis player Andre Agassi alleges that Target Corp. sold a sandal using his name without his permission. Agassi Enterprises Inc. claims it told Minneapolis-based Target in June that the sandals violated its trademark on the retired tennis player's name. On June 27, Target attorneys told Agassi Enterprises that the company had removed the name from the sandals, according to the suit. But Agassi's company said it found the men's brown flip-flops at two stores and online at Amazon.com in August and September. A Target spokeswoman said the relabelling may have missed a few stores. (AP)

Denny's Corp., the restaurant chain that lost money three of the past four years, will eliminate 80 to 90 jobs as part of a plan to save as much as $9 million annually. About $3 million of the savings will be used to increase sales and improve "operational performance," Denny's said. The job cuts will cost Spartanburg, S.C.-based Denny's as much as $4.5 million in the third quarter. Denny's shares rose 7 cents to $3.88 on the Nasdaq. (Bloomberg)

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