Early Briefing: Hotel Industry Expects Difficult Year
The hotel industry expects another difficult year as loans come due and occupancy rates drop, but the Washington area is expected to bear up somewhat better than other parts of the country. At a meeting of hotel investors in Washington yesterday, industry researchers said they expect to see an increase in hotels here and across the country defaulting on loans, going into foreclosure and seeking to restructure their debt.
Capital One Financial yesterday reported a loss of $112 million in the first quarter as defaults on credit card loans rose more quickly than the company had predicted. The McLean company also offered insight into the decline in lending by major banks, saying that it is increasingly choosing to invest money in securities rather than making new loans. The company's investment portfolio grew by $14.1 billion over the last year, while its loan portfolio grew by $5.8 billion.
Gary Perlin, the company's chief financial officer, said investing was currently safer than lending, and that Capital One would wait for economic conditions to improve before shifting the money back to lending.
Fannie Mae said it hired three veterans of large banks as it reorganizes its management structure under a new chief executive appointed this week.
Timothy Mayopoulos, 50, who left his job as Bank of America's general counsel last year, was named Fannie Mae's executive vice president and general counsel. Edward Watson, 48, a former Citigroup executive, was appointed executive vice president for operations and technology. Kenneth Phelan, 49, a former executive with Wachovia, was named executive vice president for enterprise risk management.
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