“Scale Venture Partners (formerly BA Venture Partners) announced today that it has completed a final close on Scale Venture Partners II, a $400 million fund. Foster City-based Scale, which was formerly BA Venture Partners, said that due to ‘a significant response to the offering,’ original limited partner Bank of America agreed to transfer its interest in Fund II entirely, allowing Scale Venture Partners to build a portfolio of 12 long-term limited partners. Bank of America continues to be the sole limited partner for Scale Venture Partners I, a $500 million fund… Limited Partners in Scale Venture Partners Fund II include Credit Suisse, Key Capital Corporation, Lexington Partners, Liberty Mutual, Macquarie Global Private Equity Fund, Montague Newhall, Pantheon Ventures and its affiliates, Paul Capital Partners, Storebrand, and several other domestic and international institutional investors. “

“Wells Fargo might be the next bank to distribute credit cards to checking account customers who don’t have Social Security numbers — namely, undocumented immigrants. The contentious issue captured national headlines last week after Bank of America Corp. announced plans to expand its pilot credit card program throughout Latino-heavy Los Angeles County. The bank has defended its program, saying it is designed to help BofA customers build a credit history. Now, Wells Fargo & Co. is contemplating a similar program. ‘We are exploring the possibility of offering unsecured credit cards to Wells Fargo checking account customers who do not have Social Security numbers,’ a Wells Fargo spokeswoman said. ‘Wells Fargo recognizes a great need for equal access to financial products and services for all customers who want to build credit, establish financial security and achieve the American dream’. “

“Wells Fargo & Co. is cutting 70 jobs in its Concord subprime mortgage office… ‘There are 70 positions that have been affected specifically in non-prime mortgage operations that have been impacted as a result of Wells Fargo making a decision to tighten some credit standards,’ said Chris Hammond, a bank spokesman. Wells Fargo Home Mortgage is the largest subprime home mortgage originator in the country; it generated almost $44 billion in subprime mortgages in the first half of 2006.”

“Is a blowout taking shape in the impaired-credit mortgage market? Could lax underwriting standards during the boom years — no verification of applicants’ incomes or assets, low or no down payments, and big mortgages to people already saddled with heavy debts — finally be coming home to roost? The omens are unmistakable: Delinquencies — failure to make a mortgage payment when due — in the $1.3-trillion impaired-credit mortgage market hit 12.6% in the latest quarter, up from 11.7%. Delinquencies exceeded 13% among borrowers with so-called subprime adjustable-rate loans.

Growing numbers of the companies that make or invest in subprime mortgages are themselves facing financial distress, and some have shut their doors or filed for bankruptcy protection. HSBC Holdings PLC, Europe’s largest bank and a major subprime lender in this country, shocked Wall Street recently by announcing that home loan delinquencies have gotten so bad that it has set aside $10.6 billion to cover potential losses. New Century Financial Corp., a California-based subprime lender, saw its stock plunge 36% in a single day when it announced that “buybacks” of delinquent loans had been more numerous and more costly than anticipated… Ownit Mortgage Solutions, another California subprime mortgage lender, abruptly went out of business when buyback demands reached a reported $100 million. Ownit’s chief executive, William D. Dallas, acknowledged problems in underwriting, but also blamed bond investors’ demands for high-yielding no-income verification loans.

Angelo R. Mozilo, chief executive of Countrywide Financial, was quoted as saying ‘there’s probably 40 or 50 [subprime loan originators] a day throughout the country going down in one form or another. And I expect that to continue throughout the year.’ What’s going on here? At a recent Senate hearing, a leading consumer-protection advocate, Martin Eakes, chief executive of the Center for Responsible Lending, called the subprime market ‘a quiet but devastating disaster’. “

Los Angeles Times

“Allstate Corp., which stopped covering homeowners in hurricane-prone U.S. states, may stop writing policies in California too, a state official says. “Their strategy is an exit strategy,” said Lt. Gov. John Garamendi, who oversaw Allstate rates for the last four years as insurance commissioner. “They’ve said they want to get out of the homeowners business in a market that is competitive, healthy and profitable.” He told The Los Angeles Times such a move was “stupid.” Allstate spokesman Mike Siemienas said the company would not “speculate on what future actions we’re going to take.” Citing California’s potential for natural disasters, Allstate has requested a 12 percent rate increase”.

“Rising defaults in the market for sub-prime mortgages have claimed another victim: Brea-based ResMAE Mortgage Corp. said Tuesday that it had filed for Bankruptcy Court protection. Separately, Santa Monica-based sub-prime lender Fremont General Corp. said it no longer would offer second mortgages to home buyers who need to borrow their down payment. The sub-prime market — loans to people with bad credit, high debt loads or other risk factors — has been rocked in recent days by news that more borrowers are having trouble making their payments. Last week, Irvine-based New Century Financial Corp. said it would have to restate earnings for 2006 because of losses tied to sub-prime mortgage defaults… ResMAE is at least the 20th mortgage company to be sold or closed as delinquencies rise and the market for home loans to high-risk borrowers contracts.”

“Cisco Systems on Tuesday announced a deal with South African phone service provider MTN. MTN, which does business in 21 African countries and the Middle East, joins Wataniya Telecom of Kuwait as a customer of Cisco’s systems that help shuttle data between cell sites… Cisco enhanced its financial capacity in much of the developing world with $2 billion worth of short-term inventory financing. The San Jose, California-based firm said in December that it had secured the financing from Citibank, GE Capital Solutions, and Standard Chartered Bank to help its customers in developing nations secure Cisco equipment.”

“Bank of America Corp. has begun offering credit cards to customers without Social Security numbers, a group that typically includes illegal immigrants. According to The Wall Street Journal, the BofA card is open to individuals without a Social Security number or a credit history, as long as they have held a checking account with the bank for three months without an overdraft. Charlotte, N.C.-based BofA tested the program last year at five branches in Los Angeles. Last week, BofA expanded it to 51 branches in Los Angeles County, the newspaper says. BofA is the largest bank in Los Angeles.”

“Diablo Valley Bank agreed to be acquired by Heritage Commerce Corp. for $70 million in cash and stock. About two-thirds of the purchase will be for stock and the balance in cash. The addition of Alamo-based Diablo Valley Bank, with offices in Danville and Pleasanton, will bring San Jose-based Heritage’s (NASDAQ: HTBK) assets to $1.3 billion.”

“A San Gabriel Valley bank has found itself the focus of unwanted attention after an international manhunt was launched for one of its Taiwanese owners following the collapse of several of his family’s Asian holdings… For more than a month Taiwan authorities have been attempting to arrest Wang, founder of the Rebar Group, and his wife, Chin Shih-ying. They fled Taiwan in late December as news broke of the failure of several companies, including the Chinese Bank in Taipei. Prosecutors in Taipei issued warrants on Jan, 15 for the pair on charges of embezzlement, insider trading and fraud.”