BERNANKE ASKS BANKS TO FORGIVE PORTION OF MORTGAGES

From Bloomberg:

Federal Reserve Chairman Ben S. Bernanke, battling the worst housing recession in a quarter century, urged lenders to forgive portions of mortgages for more borrowers whose home values have declined.

``Efforts by both government and private-sector entities to reduce unnecessary foreclosures are helping, but more can, and should, be done,'' Bernanke said in a speech in Orlando, Florida today. ``Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.''

CITIGROUP PUSHES PRINCE OFF OF CLIFF, WRITES DOWN ANOTHER $8-$11 BILLION

From USA Today:

With firm determination, Citigroup CEO Charles Prince declared earlier this year that 2007 was going to be the "year of no excuses."

Now he's run out of them.

Amid growing losses from subprime mortgages at the giant financial services firm, Prince, 57, retired under pressure on Sunday. He said it was "the only honorable course for me to take." Former Treasury secretary Robert Rubin, a board member and chairman of the company's executive committee, will serve as chairman of the board. Sir Win Bischoff, chairman of Citi Europe, will serve as acting CEO, the company said.

Citigroup also is lowering the value of some of its securities tied to subprime mortgages. It estimates the value of those securities, at fair market value today, would be $8 billion to $11 billion less than it expected just Sept. 30. That write-down would be in addition to a $6.5 billion write-down it has already taken. The company also said a special unit has been set up to handle the subprime mortgage problems. Citi said it has no plans to reduce its dividend.