by Caitlin Kenney

The big news this morning is that business lender CIT group will stave off bankruptcy through a deal reached with their bondholders. The company was reportedly offered a $3 billion emergency loan from a small group of them. CIT had reached out to federal regulators for additional bailout funds last week and was denied. According to Bloomberg, the company had said their collapse would put 760 manufacturing clients at risk of failure and "precipitate a crisis" for as many as 300,000 retailers.

 

Meantime, the New York Times has an interesting story about former subprime brokers getting into the loan modification game. The story centers around the Federal Loan Modification Law Center which is currently being sued for allegedly exaggerating rates of success and advising clients to stop making mortgage payments. The Times reports:

"Our job was to get the money in and then we're done," said Paul Pejman, a former sales agent who worked out of FedMod's two-story headquarters in Irvine, Calif. He recounted his experience, he said, because "I really feel bad."

"I had people calling me crying, and we were telling them, 'You can pay me or you can lose your house,' " Mr. Pejman said. "People were giving me every dime they had, opening credit cards. But I never saw one client come out of it with a successful loan modification."

FedMod's Managing partner, Nabile Anz, told the Times the company has refunded fees to dissatisfied customers and has successfully modified 1,500 mortgages.