Pipeline

Literacy Street

HSBC Holdings PLC played a major behind-the-scenes role in a new PBS documentary made to promote financial literacy.

The HSBC in the Community (USA) Inc. Foundation sponsored "Your Life, Your Money," which premiered on most PBS affiliates Wednesday night. The hour-long program offers straightforward advice on topics from budgeting, credit cards and student loans to taxes, health insurance and retirement savings.

HSBC donated almost $1.5 million to the WNED Buffalo/Toronto television station to produce the documentary. Though the company's sponsorship was mentioned in the opening and closing credits, HSBC otherwise stayed offscreen.

"We really looked to just get the real concepts out," said Heather Nesle, an HSBC vice president of community and philanthropic services, after a 6:30 p.m. screening in New York that her company held on Tuesday. (She even told young adults during a question-and-answer session afterward that, if they needed further financial education, "any bank, not just HSBC," should be able to provide more information.)

HSBC's foundation, which focuses on financial education and environmental projects, approached WNED more than a year ago with its grant offer and the idea for a television program.

"We allowed them to develop it without having to showcase HSBC, but we did provide a lot of resources," Nesle said. For example, "we organized all the shoots — a lot of the footage was taken in HSBC branches."

The program is hosted by the actor Donald Faison and includes advice from personal-finance experts like Beth Kobliner, Michelle Singletary, Ron Lieber and the hip-hop mogul Russell Simmons. (His RushCard, a high-profile, and high-cost, prepaid card, is not mentioned.)

But the documentary's focus is on profiles of six adults who are starting, or restarting, their professional and financial lives. For example, one segment follows Rochelle James, a New Yorker who overcame debt and the financial stress caused by her mother's death by becoming a union electrician who now earns $47 an hour.

Her story — and the documentary's overall message about the importance of financial literacy — seemed to resonate with the target audience, at least judging by responses at the screening.

The audience members, who ranged from elementary school to college age and beyond, stayed around for a panel discussion afterward, asking questions about financial basics until almost 9 p.m. (HSBC did provide incentives in the form of piggy banks for question-askers — not to mention snacks.)

"I sort of thought, 'It's the first day of school, and on a Tuesday night, who's going to show up?' And I had to turn people away," Nesle said.

Trough of the 'U'

Even if house prices bottom out in mid-2010, they are unlikely to appreciate "for a protracted period," according to Navneet Agarwal, a senior vice president at Moody's Investors Service Inc.

A significant number of the 1.8 million units expected to go through foreclosure this year are still working their way through the process, and that number does not take into account "the conundrum of unaffordability" and underwater mortgages, Agarwal wrote in a report published Wednesday.

"Given the outsized bet that many homeowners made on rising home prices when they took out their mortgage loans, many borrowers today either cannot or will not continue to pay on their underwater mortgage loans."

A Third Way

Private-equity investors originally were going to buy toxic residential loans directly from banks. When that plan failed because buyers and sellers were too far apart on price, the goal became to buy the problem loans from the Federal Deposit Insurance Corp. Now a third option is being tried.

Edward Carpenter, the chairman of Carpenter & Co., an Irvine, Calif., investment bank that specializes in start-up banks, said he has raised $450 million to buy problem assets by purchasing the banks themselves.

At a panel discussion in Irvine last week sponsored by Manatt, Phelps & Phillips LLP, Carpenter said his strategy is to separate the "bad bank," rework its loans and sell them when the market rebounds. He will keep a stake in the remaining "good bank."

Carpenter estimated that roughly 2,800 of the 8,500 banks in the United States need to raise capital right now and said those are the banks to bet on because they are cheap.

"Everything in our economy has repriced," he told the audience of 125, mostly bankers. "We're betting on revaluation in the small-bank sector and problem loans."

Eye on Applications

Applications for both purchase and refinance loans jumped in the week that ended last Friday as the average 30-year fixed rate fell another 13 basis points, to 5.02%, the Mortgage Bankers Association said Wednesday.

The trade group said its refinance index increased 22.5%, its biggest gain since March. The MBA's seasonally adjusted purchase index rose 9.5%, to its highest level since January. The drop in the 30-year rate came after a 9-basis-point fall the previous week.