EOUST Re-issues Enforcement Guidelines for Debtors Affected by Natural Disasters in Aftermath of Hurricanes Harvey and Irma; Freddie Mac to Halt Evictions, Foreclosures



Clifford J. White, director of the Executive Office for U.S. Trustees (EOUST), today re-issued EOUST enforcement guidelines for bankruptcy debtors affected by natural disasters. "In the wake of Hurricane Katrina in 2005, the Program adopted these policies to ensure that we administer bankruptcy cases in a manner that takes into account the hardships experienced by victims of hurricanes and other natural disasters," White said in a memorandum addressed to U.S. Trustees. He encouraged U.S. Trustees to share the memorandum, and for U.S. Trustees in areas impacted by Hurricane Harvey and Hurricane Irma to notify the chapter 7, 12, and 13 trustees in the affected districts of the Program's guidelines and ask that they, too, "demonstrate prosecutorial discretion and coordinate with you as appropriate." Click here to read White's memorandum and the EOUST's Enforcement Guidelines for Bankruptcy Debtors Affected by Natural Disasters.



Freddie Mac said yesterday that it will suspend sales of foreclosed homes until year-end and will stop until further notice evictions of homeowners in eligible areas devastated by Hurricanes Harvey and Irma, Reuters reported. The U.S. mortgage finance agency said it is working with loan servicers to ensure that no property inspection costs resulting directly from Harvey or Irma are passed on to borrowers who were impacted. “They may be able to put their mortgage payments on hold for up to one year if their mortgage is owned or guaranteed by Freddie Mac. The first step is for borrowers to contact their mortgage servicers,” said Yvette Gilmore, Freddie Mac’s vice president of single-family servicer performance management. Areas eligible for relief include counties or municipalities in Texas and Florida declared disaster areas by the Federal Emergency Management Agency.





In related news, Florida residents recovering from the damage wrought by Hurricane Irma are finding a lack of insurance adjusters, which is threatening to anger policyholders and potentially delay the state’s rebuilding efforts, the Wall Street Journal reported today. Many of the state’s adjusters are 1,000 miles away, working on claims made after Hurricane Harvey hit Texas. Insurers are scrambling to get more adjusters to Florida, creating a bidding war for those who are available. Some Florida home insurers have increased fees paid to adjusters by about 30 percent, insurers and adjusters say.





This year’s hurricane season has become one of the most destructive in recent memory. To provide assistance to those affected and direct others in how you can help, ABI encourages you to visit our Hurricane Relief webpage.

Puerto Rico Financial Oversight Board Hires Firm to Review Debt Sales



The Financial Oversight and Management Board for Puerto Rico said yesterday that it hired investigations firm Kobre & Kim to review the U.S. territory's past debt issuance and how it relates to the current fiscal crisis, Reuters reported. "The Special Committee considers this investigation an integral part of the Board's mission to restore fiscal balance and economic opportunity and to promote Puerto Rico's reentry to the capital markets," the board said in a statement. The firm was selected after the special committee of the board issued a request for proposal in August. The investigation will review "contributors" to Puerto Rico's crisis and examine the island's debt and issuance, including disclosure and selling practices, the statement said.





For updated news and analysis of Puerto Rico's debt crisis, along with current docket filings in Puerto Rico's case, be sure to visit ABI's "Puerto Rico in Distress" webpage.

Outlook for Auto Delinquencies Improves



Experian's second-quarter "State of the Automotive Finance Market" report found that the 30-day delinquency rate for all loans and leases fell to 2.20 percent in the second quarter from 2.22 percent a year earlier, Automotive News reported yesterday. The 60-day delinquency rate crept up to 0.67 percent from 0.62 percent a year earlier. The improvement in the 30-day rate was driven by the shift to a more prime-risk market in recent quarters, said Melinda Zabritski, Experian's senior director of automotive financial solutions. "We're not quite seeing it yet on 60, but we're probably just a few quarters away from 60-day improving," she said. Superprime loan and lease originations made up 19.1 percent of the market in the second quarter, up from 17.9 percent a year earlier. Prime-risk loan and lease originations dominated with a 39.4 percent share, up from 39 percent a year earlier. Total subprime loan and lease originations, however, dropped to 18.4 percent of the market in the second quarter from 19.3 percent in the previous period. The share of deep subprime originations also fell slightly, to 3.45 percent from 3.54 percent.

For Struggling Consumers, a Cheaper Way to File for Bankruptcy



A nonprofit startup is tackling what consumer advocates say is the biggest barrier that financially struggling people face in their efforts to get a fresh start: the surprisingly steep cost of bankruptcy, the Wall Street Journal reported. The founders of Upsolve have created a TurboTax equivalent for bankruptcy designed to help people with basic financial problems — such as mounting medical or credit card debt — pull together information for a chapter 7 filing without having to pay for a lawyer. The idea, says Rohan Pavuluri, a Harvard University student and one of Upsolve’s founders, is to “make one of the biggest safety nets in America more accessible.” The online project, which won $75,000 in funding in a Harvard-sponsored competition in May, has left some consumer advocates wondering whether this free software could disrupt this sector of the legal industry. Upsolve’s program converts a person’s answers to a questionnaire into court documents that can be used to file for chapter 7 protection. While filing for chapter 7 protection is the simplest way for debt-laden consumers to get a fresh start, the cost of such cases jumped when Congress in 2005 passed a law designed to reduce perceived fraud. The law added paperwork and required filers to attend credit-counseling classes at their own expense. The result, according to a 2012 ABI Endowment Fund study, was that the overall cost of an average successful chapter 7 filing rose to about $1,300 from $868. The law caused a “permanent drop in the chapter 7 bankruptcy rate” and a rise in the rate of insolvency and foreclosure, a 2015 Federal Reserve Bank of New York study found.

Consumer Commission Meetings set for Tomorrow at NABT, Oct. 10 at NCBJ



The Commission’s next public meeting will be led by the Committee on Chapter 7 tomorrow during the National Association of Bankruptcy Trustees conference in New Orleans. For the list of witnesses set to testify at the open meeting tomorrow, please click here.  



The Committee on Case Administration & the Estate of the ABI Commission on Consumer Bankruptcy will also hold a public meeting during the annual conference for the National Conference of Bankruptcy Judges (NCBJ) on October 10, 2017, from 10:45 AM – 1:00 PM in the Paris Las Vegas Hotel, Versailles rooms 1-2, in Las Vegas. To find out how to participate at the open meeting, please click here.



To access the list of topics under consideration by the Commission’s committees and previous hearing statements, please click here.

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!

Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!



Tap into Rochelle’s Daily Wire via the ABI Newsroom and Twitter!