Early Briefing: Giuliani Comes To Town
* Berman Enterprises of Rockville is teaming with Giuliani Partners, an investment firm founded by former New York City mayor Rudy Giuliani, in a fund that will invest in commercial and residential real estate. The Berman Enterprises Opportunity Fund will seek to raise $500 million to $750 million from foreign investors to buy properties in Washington, New York and elsewhere, according to Jeffrey Berman, a partner in Berman Enterprises.
* The salaries of Freddie Mac chief executive Richard F. Syron and Fannie Mae chief executive Daniel H. Mudd should be capped if taxpayers are forced to pick up the tab for the faltering performance of the companies, two members of the Senate Banking Committee said.
Sens. Chuck Hagel (R-Neb.) and Robert P. Casey Jr. (D-Pa.) sent separate letters last week to Treasury Secretary Henry M. Paulson Jr. asking for the limits to be included in the Bush administration's plan to extend credit and buy equity in the two mortgage-finance companies. Congress is expected to vote on Paulson's proposal as early as this week. Hagel cited how losses have cost executives at Citigroup Lehman Brothers and Merrill Lynch their jobs.
Freddie Mac boosted Syron's total compensation by 24 percent to $18.3 million last year as the shares fell 50 percent and the company posted third- and fourth-quarter losses totaling $4.5 billion. Fannie Mae raised Mudd's pay by about 3.2 percent to $11.6 million, according to its proxy statement.
* On Reservoir Hill, just north of downtown Baltimore, one of this city's most hopeful revitalization projects is falling apart. Over the past two years, 95 properties have fallen into foreclosure. On one dismal street, three blocks of apartment buildings and rowhouses -- many freshly renovated -- stand vacant, their doors and windows boarded over to ward off thieves.
Eighteen months ago, Reservoir Hill was a prime example of the progress that cities across the country have made reclaiming blighted neighborhoods as a nationwide housing boom helped lure homeowners and chase away crime. Now the mortgage crisis threatens to reverse those gains as foreclosures multiply, house prices plunge and vacancies rise.
The plight of the cities has become the focus of intense negotiations over a far-reaching housing bill pending in Congress. In exchange for their support for a Bush administration plan to rescue ailing mortgage finance giants Fannie Mae and Freddie Mac, Democratic leaders are demanding $4 billion in emergency aid to stabilize hard-hit communities by purchasing vacant and foreclosed properties.
But the White House Monday again threatened to veto the bill unless the money is removed. "It is astonishing to me that the Democrats would want to say, 'Oh, that's great. Now that we have them over a barrel, let's use this as an opportunity to get spending in the bill,' " said White House spokesman Tony Fratto. "This is a wasteful program that will not help the housing correction and will primarily serve as a bailout to those very lenders who foreclosed on homeowners."
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