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April 25, 2008
Housing
name='1'>Democrats Maintain Momentum for Housing
Stimulus Package
As they race toward
clearing a housing stimulus measure, top
Democrats are attempting to create the same environment that led to
passage of the economic stimulus
package,
size='3'>CongressDaily reported today.
The Senate passed its housing stimulus package on April 10, which would
provide $4 billion for cities to purchase
and rehabilitate foreclosed properties and about $13 billion in specific
tax breaks to spur additional home
buying and calm the housing industry. The House is assembling its
broader package to be on the floor the week of
May 5. That week, Senate Banking Chairman
w:st='on'>
size='3'>Christopher Dodd
(D-Conn.) will hold a markup on his bill that
would allow the Federal Housing Administration to refinance up to $400
billion in troubled mortgages, as well as
long-stalled legislation to revamp oversight at government-sponsored
enterprises Fannie Mae and Freddie Mac.
Acting HUD Secretary Roy Bernardi said in a letter yesterday that the
Bush administration strongly opposes H.R.
5830, sponsored by House Financial Services Committee Chairman Barney
Frank (D-Mass.), which would expand the
ability of FHA to refinance troubled subprime mortgages, a companion
measure to the Dodd bill.
Bernardi specifically criticized a
provision that would apply to borrowers
with a higher debt-to-income ratio than FHA allows. However, Frank said
that he was later informed by Treasury
Department staff that it was not an explicit veto threat.
name='2'>FHA Works to Prop Up Housing
Market
Last year, the Federal
Housing Administration's (FHA) insurance
fund paid $158.6 million in incentives to keep lenders from foreclosing
on mortgages backed by the government,
the Wall Street
Journal reported today.
That is a 61 percent increase from five years ago, according to
government data. As a result, more than six in 10
homeowners who defaulted on FHA-insured loans were able to stay in their
houses, up from three in 10 in 2000.
Democrats are promoting bills that would help refinance challenged
borrowers into affordable loans backed by the
FHA. As many as two million mortgages with a value of $300 billion could
be included. These borrowers would then
be eligible for the kind of helping hand offered to existing FHA
homeowners. House Financial Services Chairman
Barney Frank (D-Mass.), who is a sponsor of such a bill, has estimated
that his proposal could cost between $3
href='http://online.wsj.com/article_print/SB120908308114243473.html'>Read
more. (Registration required.)
name='3'>Struggling Homebuilder Files for Chapter
11
The mortgage downturn
claimed another victim Wednesday, as Kimball
Hill Inc., one of the largest homebuilders in the
w:st='on'>
face='Times New Roman' size='3'>United
States, filed for
chapter 11 protection,
size='3'>Bankruptcy Law360
size='3'>reported yesterday. The company filed a voluntary petition
along with 29 subsidiaries, many of which
operate under the Kimball Hill Homes name. Kimball Hill
size='3'>listed assets of $795.5 million and debts
of almost $632 million. The Rolling Meadows, Ill.-based company has been
building homes since 1969 and currently
operates in various markets of
face='Times New
&
#13; 



&
amp;amp;amp;#13;
Roman'
size='3'>Texas,
w:st='on'>
size='3'>Illinois,
w:st='on'>
size='3'>Nevada,
w:st='on'>
size='3'>California and
size='3'>Florida. Kimball
Hill is hoping to continue to operate its
business as it proceeds through the chapter 11 process toward
reorganization, although it has already begun to
wind down its operations in
w:st='on'>
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=54182'>Read
more. (Registration
required.)
name='4'>Struggling Owners of Expensive Homes Look
for Ways to Stave Off Foreclosure
Affluent but
cash-squeezed owners are finding ways to delay losing
their homes, sometimes by coming up with just enough to make last-minute
payments, avoiding a final sale,
the New York
Times reported today. As
millions across the nation face the threat of losing their homes,
homeowners in affluent towns like
size='3'>Greenwich
size='3'>,
size='3'>Conn., are
tapping into other resources that most people
cannot call upon to help prevent foreclosure. In
w:st='on'>
face='Times New Roman'
size='3'>Greenwich,
foreclosure filings were
made against 100 homes last year, according to RealtyTrac. That
translates into less than half of 1 percent
of
size='3'>Greenwich’s
24,511 households, compared with a rate
higher than 1 percent nationwide. Lawyers working on
w:st='on'>
face='Times New Roman'
size='3'>Greenwich’s
early foreclosure
cases predict that most homes will never reach the auction stage because
their homeowners almost always have
href='http://www.nytimes.com/2008/04/25/business/25foreclose.html?_r=1&oref=slogin&ref=business&pagew
anted=print'>Read more.
name='5'>Sharper Image to Pursue Potential
Buyers
Bankrupt specialty
retailer Sharper Image Corp. has announced it
will sell its business and solicit bids from interested buyers, with
hopes of wrapping up the sale by the end of
next month, Bankruptcy
Law360 reported
yesterday. The company plans to seek the court's approval of the sale
before May 31. The move comes after Sharper
Image's chairman of the board, Jerry Levin, quit on April 10 after he
notified the company of his interest in
acquiring some or all of its business or assets.
w:st='on'>
face='Times New Roman' size='3'>Conway
said at the time that Sharper
Image would “give full consideration to any proposal that may be
made to acquire the company's business or
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=54097'>Read
more. (Registration required.)
Airlines
name='6'>Delta and Northwest Try to Reassure
Congress on Merger
The chief executives of Delta
Air Lines Inc. and Northwest Airlines
Corp. yesterday sought to reassure Congress that their planned merger
would not hurt service, cut jobs or blunt
competition, Reuters reported yesterday. Richard Anderson of Delta and
Douglas Steenland of Northwest also told a
hearing of the antitrust task force in the House of Representatives that
the combination would enable the two to
better compete as the industry struggles with skyrocketing fuel prices.
Northwest and Delta blamed a doubling of
fuel prices in the past year for a combined loss of $465 million in the
first quarter.
href='http://www.nytimes.com/reuters/business/business-delta-merger.html?sq=bankruptcy&st=nyt&scp=5&p
agewanted=print'>Read more.
name='7'>Bankruptcy Court Approves
size='3'>Sale
of Aloha's Services Division
Bankruptcy Judge
size='3'>Randall Newsome yesterday authorized
the $2.05 million sale of Aloha
Airlines’ contract services division to Pacific Air Cargo,
the
size='3'>Honolulu Advertiser reported today.
The profitable aviation services unit,
which employs about 1,100 workers, handles customer service, baggage
service, ticket agents and ramp agents for
United Airlines, Japan Airlines and other carriers that serve
w:st='on'>
size='3'>Hawaii. The deal
is
href='http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080425/BUSINESS03/804250346'>Read
more.
Delays Ruling in Nifong
Case
Bankruptcy Judge
size='3'>William L. Stocks delayed ruling
yesterday on whether Durham (N.C.) District
Attorney Mike Nifong's bankruptcy filing should continue to hold up the
civil suit against him by three former
Duke lacrosse players, the
size='3'>Raleigh News and Observer
reported today. Judge Stocks delayed a ruling until next
month to give lawyers time to do more
legal research. The three exonerated players, Dave Evans, Collin
Finnerty and Reade Seligmann, filed suit in
October alleging that Nifong,
w:st='on'>
size='3'>Durham police and
others conspired to charge them with
gang-rape allegations that were 'a total fabrication.' Nifong, who was
disbarred last year for misconduct in the
lacrosse case, filed for bankruptcy protection in January, a legal
maneuver that put the civil claims by the
three exonerated players and others on hold.
href='http://www.newsobserver.com/news/crime_safety/duke_lacrosse/story/1049324.html'>Read
more.
International
name='9'>Heavy Borrowing Comes Back to
Haunt
face='Times New Roman'
size='3'>Australia
size='3'>Brokerages
Freewheeling borrowing to
buy stocks has led to brokerage
collapses in
w:st='on'>
size='3'>Australia
size='3'>, fueled by broad-ranging margin calls
in a shaky market, the
size='3'>Wall Street Journal
size='3'>reported today. Two brokerage firms -- Opes Prime Stockbroking
Ltd. in
face='Times New Roman' size='3'>Melbourne
size='3'>and Lift Capital Ltd. in
size='3'>Sydney -- have
been forced into receivership, the
Australian equivalent of bankruptcy, after nervous creditors withdrew
their support. A third brokerage, Tricom
Equities Ltd., is staggering under similar debt burdens, and traders
expect more firms will go under. The
expansion-minded brokers borrowed heavily, using customers' shares as
collateral. When the market went into a
tailspin, the lenders liquidated the customers' holdings in an attempt
to minimize their own losses. The
brokerages' creditors, Australia & New Zealand Banking Group Ltd.,
the country's fourth-biggest lender by
market capitalization, and Merrill Lynch & Co. together dumped more
than two billion Australian dollars ($1.9
billion) in shares they held as collateral.
href='http://online.wsj.com/article_print/SB120908213938443413.html'>Read
more. (Registration
required.)
name='10'>EU, Rival Airlines Balk at
size='3'>Italy's
Alitalia
Bailout
While the Italian
government has moved to bail out Alitalia with a
€300 million aid package, the European Union may put a stop to the
potentially anti-competitive rescue
effort before the struggling airline can get off the ground,
size='3'>Bankruptcy Law360 reported yesterday.
EU regulators said yesterday that
size='3'>Italy's
proposed bailout may violate European
Union laws regarding state aid for public companies. The commission's
doubts center on whether the bailout
package can be classified as state aid. If the money is state aid, it
must be reported to the EU regulators and
approved. The regulators also may veto the state aid if regulators
determine that it will stifle
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=54196'>Read
more. (Registration required.)
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