href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif'>
December
14, 2007
Mortgage
Lending
name='1'>FHA Loan Expansion Heading to a Vote
Hundreds of thousands of
minority and moderate-income home buyers would become eligible to get
low-rate, low-down-payment mortgages insured by the federal government
under an agreement struck yesterday in the Senate, the
face='Times New Roman' size='3'>Washington Post
size='3'>reported today.
size='3'>The measure is expected to get a full floor vote today or
Monday and would greatly expand the Federal Housing Administration's
mortgage insurance program that helps people with questionable credit
get low-interest home loans. The delay of the bill drew the ire of the
Bush administration and House lawmakers on both sides of the aisle, as
the pressure increased on the federal government to address the
worsening mortgage crisis. The House passed its version in September,
348 to 72. The legislation aims to draw people away from subprime loans,
which offer low 'teaser' rates that can jump as high as 11 percent after
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/12/13/AR2007121301845_pf.html'>Read
more.
name='2'>Senate Finance Considers
face='Times New Roman' size='3'>Battery
size='3'>of Mortgage Relief Bills
Legislation to provide
relief for struggling homeowners facing foreclosure got a boost today as
Senate Finance Committee members agreed that a bill, most likely a
combination of House and Senate measures, needs to reach the president's
desk before Congress adjourns for the year, CongressDaily reported
yesterday. One measure introduced by Sen. Debbie Stabenow (D-Mich.) in
May would temporarily change the tax code so that homeowners are not
penalized when they work out a deal that keeps them in their home or
they sell their home for less than the outstanding debt. In a letter to
the committee, Sen. George Voinovich (R-Ohio), who co-sponsored
Stabenow's bill, suggested that the fastest route to President Bush
could be for the Senate to take a House-passed bill that is similar to
the Stabenow measure and waiting for Senate action. The main difference
is that `the Senate measure calls for temporary change in the tax code
whereas the House bill would make the change permanent. During a hearing
yesterday by the Finance committee, witnesses provided several solutions
that could help ease the housing market pressure, including a limited
change to the bankruptcy laws.
href='http://finance.senate.gov/sitepages/hearing121307.htm'>Click
here to read the written testimony from yesterday’s
Senate Finance Committee hearing.
name='3'>House Members Urge Strong Consumer Mortgage Protections in
New Federal Reserve Rules
Nineteen Democratic
members of the House Financial Services Committee yesterday sent a
letter to Federal Reserve Chairman Ben Bernanke urging strong consumer
protection for mortgages and mortgage lending practices in new rules
that are soon to be released, according to a press release. The rules
would be issued under the Home Ownership and Equity Protection Act,
passed in 1994, and has taken on new importance since the subprime
mortgage crisis now threatens the overall economy.
href='http://www.house.gov/apps/list/press/financialsvcs_dem/press121307.shtml'>Click
here to read the letter.
name='4'>Commentary: Fed Rescue Won’t be the Only Way to Solve
Current Crisis
While the Fed has been
able to stem financial distress caused by lack of investor confidence,
there are a couple of reasons why the current financial crisis involving
the housing market is being fed by more than just lack of investor
confidence, according to a commentary in today’s
face='Times New Roman' size='3'>New York Times
size='3'>. First, we had an enormous housing bubble in the middle of
this decade and to restore a historically normal ratio of housing prices
to rents or incomes, average home prices would have to fall about 30
percent from their current levels. Second,
there was a tremendous amount of borrowing into the bubble, as new home
buyers purchased houses with little or no money down, and as people who
already owned houses refinanced their mortgages as a way of converting
rising home prices into cash. Markets won’t start functioning
normally until investors are reasonably sure that they know where the
bad debts are buried. That probably won’t happen until house
prices have finished falling and financial institutions have come clean
about all their losses.
href='http://www.nytimes.com/2007/12/14/opinion/14krugman.html?ref=opinion&pagewanted=print'>Read
more.
name='5'>Big Rescue of Funds by Citigroup
Citigroup moved yesterday
to rescue seven affiliated investment funds that have been upended by
the running crisis in housing-related debt, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. As part of its bailout, Citigroup is likely to
shift billions of dollars’ worth of securities from the troubled
structured investment vehicles onto its own balance sheet early next
year. The decision, which reverses earlier statements made by bank
executives and in regulatory filings, marks the biggest move yet by a
bank to bail out ailing SIVs. Several European banks, including HSBC and
Société Générale, have taken similar measures.
Citigroup, the largest manager of SIVs, said that it would finance the
repayment of debt issued by its vehicles as early as mid-January. Its
SIVs hold about $49 billion worth of largely high-grade assets, and the
bank expects to unload more over the next year.
href='http://www.nytimes.com/2007/12/14/business/14citi.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='6'>Collins & Aikman Trust Challenges Three Fee
Bids
Collins & Aikman's
post-consummation trust is objecting to the final fee applications of
three companies in the auto parts maker's chapter 11 case, arguing that
they have failed to settle with the court-appointed fee examiner,
Bankruptcy Law360
reported yesterday. The trust said that requests for
reimbursement of expenses by KZC Services LLC, Akin Gump Strauss Hauer
& Feld LLP and Alvarez & Marsal LLC should be denied. While it
did not object to the vast majority of professional fees applied for in
the case, the trust said that Collins & Aikman's case presented
“unusual circumstances that have led multiple stakeholders, as
well as the court, to raise questions about the level of professional
fees billed to the estate.”
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=42313'>Read
more. (Registration required.)
Approves Bid Rules for Blackhawk Automotive sale
Bankruptcy Judge
Kay Woods
size='3'>on Tuesday gave auto parts maker Blackhawk Automotive Plastics
Inc. permission to put its business on the auction block, Dow Jones
Newswires reported yesterday. Judge Woods also granted final approval of
Blackhawk's bankruptcy financing pact, which rolls up some $36 million
owed to its lenders into a debtor-in-possession loan. Bids for all or a
portion of Blackhawk's assets are due Feb. 29, and the sale or sales
must be ready to close by March 14, under the timeline submitted to the
bankruptcy court. The Salem, Ohio-based maker of plastic automobile
parts is putting itself up for sale despite not having lined up a
stalking horse bidder for its assets.
href='http://www.detnews.com/apps/pbcs.dll/article?AID=/20071213/UPDATE/712130488'>Read
more.
name='8'>Musicland Creditors Seek Approval of
Settlements
Bankrupt music retailer
Musicland Holdings Inc. asked for approval of settlements for a slew of
adversary claims filed over prepetition transfers, bringing the company
one step closer to completing its liquidation,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday.
size='3'>Musicland's unsecured creditors' committee asked Judge
Stuart M. Bernstein
to sign off on agreements reached with AT&T Inc.,
Certegy Check Services, Inc., The Lacek Group and Sony Electronics.
Musicland, which operated retail stores under the names Sam Goody and
Suncoast Motion Pictures, has opted for liquidation instead of
reorganization. The company filed for chapter 11 protection in January
2006 after it failed to secure credit from its vendors.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=42200'>Read
more. (Registration required.)
name='9'>Inflation Accelerated Last Month on Higher Prices for
Energy
w:st='on'>
size='3'>U.S.
size='3'>consumer prices surged in November on the back of sharply
higher energy prices while underlying inflation accelerated at its
fastest pace in 10 months, providing fresh evidence that the
disinflation trend in place for much of 2007 may be coming to an end,
the Wall Street
Journal reported today. Consumer prices were
up 4.3 percent from a year ago, matching the highest rate since
September 2005. The core CPI was up 2.3 percent compared to the same
month a year ago, up from 2.2 percent in October representing the first
increase in annual core inflation since January.
href='http://online.wsj.com/article/SB119763743685729349.html?mod=us_business_whats_news'>Read
more. (Registration required.)
International
name='10'>HSBC to Get $1.5 Billion from
w:st='on'>
size='3'>Taiwan
size='3'>to Take over Bank
HSBC will receive T$47.5
billion ($1.5 billion) in Taiwan government funds and make a major cash
infusion to rescue the failed Chinese Bank, in the latest Taiwan
acquisition by a major foreign bank, Reuters reported today. HSBC said
today that it would inject $300-$400 million of additional capital into
the small lender to ensure its enlarged operations maintain appropriate
financial ratios. The
w:st='on'>
size='3'>Taiwan
size='3'>government said that it would give the T$47.5 billion to HSBC
to take over Chinese Bank as part of an effort to push consolidation of
the overcrowded banking industry, which has largely emerged from an
island-wide consumer credit crisis that peaked in 2006.
href='http://www.nytimes.com/reuters/business/business-hsbc-acquisition-taiwan.html?pagewanted=print'>Read
more.
href='http://www.nytimes.com/reuters/business/business-hsbc-acquisition-taiwan.html?pagewanted=print'>