ABI Announces 2022 "40 Under 40" Emerging Leaders in Insolvency Practice​​​

ABI announces the honorees of its 2022 “40 Under 40” initiative, which identifies 40 top industry professionals under age 40. The honorees will be recognized at a special ceremony to be held on Dec. 9 at ABI’s 2022 Winter Leadership Conference at the La Quinta Resort & Club in La Quinta, Calif. “The 2022 honorees continually display the acumen, energy and passion in both their careers and communities to demonstrate that they are the future leaders of the insolvency profession,” said ABI Executive Director Amy Quackenboss. “This year’s class, like those in years past, brings together a widely diverse collection of young leaders who we fully expect will propel ABI and the insolvency community forward.” Nominations were submitted earlier this year by the candidates themselves or by colleagues via the initiative’s website, http://abi40under40.org. More than 200 candidates, each with outstanding records of professional achievement and community leadership, were evaluated by members of a 20-person steering committee. The majority of the applicants were partners, directors or managing directors at their firms. Click here to view the press release announcing the winners. Read more.

U.S. Weekly Jobless Claims Fall​​​

The number of Americans filing new claims for unemployment benefits fell unexpectedly last week, indicating that the labor market remains tight even as demand for labor is cooling amid higher interest rates, Reuters reported. Initial claims for state unemployment benefits fell to a seasonally adjusted 214,000 for the week ended Oct. 15, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 fewer applications filed than previously reported. Economists polled by Reuters had forecast 230,000 applications for the latest week. The labor market has been largely resilient, although some cracks are emerging as the Federal Reserve ramps up its monetary policy tightening campaign. The U.S. central bank has hiked its policy rate from near-zero at the beginning of this year to the current range of 3.00% to 3.25%, and officials have signaled that more large increases are on the way this year, as inflation has shown little signs yet of a substantial retreat. The government reported earlier this month that job openings dropped by 1.1 million, the largest decline since April 2020, to 10.1 million on the last day of August. But economists do not expect widespread layoffs, saying companies were wary of releasing their workers after difficulties hiring in the past year as the COVID-19 pandemic forced some people out of the workforce, partly due to prolonged illness caused by the virus. The claims report showed that the number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 21,000 to 1.385 million in the week ending Oct. 8. Read more.

FDIC Chair: Banking Agencies to Provide Guidance on Crypto After Better Understanding Risks​​​

Banking regulators expect to provide industry guidance to financial institutions on crypto-related activities once agencies better understand the associated risks, said Martin Gruenberg, the acting chairman of the Federal Deposit Insurance Corp., Reuters reported. "We must understand and assess the risks associated with these activities the same way that we would assess the risks related to any other new activity," Gruenberg said. Gruenberg also added that a potential future payments system based on the use of stablecoin, which are crypto-assets typically pegged to the U.S. dollar, should complement the Federal Reserve's forthcoming FedNow service, as well as a possible U.S. central bank digital currency. Read more.

Where Can You Get 30+ Hours of Innovative Online Consumer Bankruptcy Programming and Networking for $100? Register Today for CPEX 2022!​​​

The virtual Consumer Practice Extravaganza from Nov. 10-18 promises to be the premier consumer debt event of the year. Leading practitioners will explore the latest consumer debt practices, including student loans, post-Covid mortgage issues and more during more than 30 hours of innovative online programming. Six broad session tracks will ensure that there is something for everyone: Student Loans, Technology and the Future, Subchapter V, Well-Being, Nontraditional Practice and Vendors: Expanding Your Toolbox. CPEX22 will also feature a range of special “demo days,” showcasing technology and money-saving tools especially designed for consumer practitioners, circuit-specific breakout sessions, and plenaries focused on issues relevant to the entire consumer bench and bar. Register for all this and more for only $100! 

Recession Fears Hit Risky Mortgage Debt Amid Default Concerns​​​

Investors are unloading securities sold by Fannie Mae and Freddie Mac that shift the risk of mortgage defaults away from taxpayers, a sign of growing concern about defaults if rising interest rates cause a severe recession, the Wall Street Journal reported. The securities, called credit-risk transfers, could incur losses if rising defaults creep into the massive swaths of mortgage debt backed by the housing-finance giants. The Federal Reserve’s interest rate increases have shown signs of cooling the pandemic’s roaring real estate market, and many worry that the central bank’s inflation-fighting may cause a recession that hurts homeowners’ ability to repay their loans. That has spooked some investors who hold securities tied to riskier cash flows from mortgage debt backed by Fannie and Freddie. Asset-managers, pensions and hedge funds all invest in the roughly $60 billion credit risk transfer (CRT) market, which acts as insurance for the two agencies against defaults on slices of roughly $4.5 trillion of mortgages that would otherwise spell losses for U.S. taxpayers. As clouds darken over the housing market and the economy as a whole, investors are sending CRT prices lower and demanding greater compensation to hold them. Through last week, typical junk-grade CRTs were yielding 6.75 percentage points more than ultrasafe U.S. Treasury bonds, according to JPMorgan data. (Subscription required.) Read more.

U.S. Existing Home Sales Slide Again in September​​​

U.S. existing home sales dropped for an eighth straight month in September as surging mortgage rates and still-elevated selling prices push affordability beyond the reach of many prospective buyers, Reuters reported. Existing home sales fell 1.5% to a seasonally adjusted annual rate of 4.71 million units last month, the National Association of Realtors said on Thursday. Outside of the short-lived plunge during the spring of 2020, when the economy was reeling from the first wave of COVID-19, this was the lowest sales level since September 2012. Home resales, which account for the bulk of U.S. home sales, decreased 23.8% on a year-on-year basis. Data this week showed confidence among homebuilders eroding for the 10th straight month in October, and ground-breaking for new single-family home projects tumbled to the lowest level in more than two years in September. Read more.

Wednesday’s abiLIVE Webinar Will Provide a Better Understanding of CMBS Loans and Possible Restructuring Strategies​​​

According to Trepp, $109 billion in commercial mortgage-backed securities (CMBS) loans was issued in 2021. However, given their structure as investment vehicles, technical nuances come into play in workout and restructuring situations because of the special servicers and trustees involved. While bankruptcy filings are rare because filing typically violates a loan covenant known as a “Bad Boy provision," for some borrowers this path makes sense. A special abiLIVE webinar next Wednesday sponsored by ABI's Real Estate Committee will focus on these issues and more to prepare attorneys, financial advisors and other professionals for future restructuring assignments in this unique space. Register for FREE!

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