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March 16, 2005
Ney, Kanjorski Introduce Subprime Mortgage Bill
House Financial Services Housing Subcommittee Chairman Robert Ney
(R–Ohio) and Financial Services Capital Markets ranking member
Paul Kanjorski (D–Pa.) introduced legislation yesterday that aims
to protect consumers from predatory lending in the subprime mortgage
market, CongressDaily reported. The bill would create
uniform national standards that would pre-empt state predatory lending
laws. Ney and Kanjorski said those standards, and other provisions in
the bill, would curb industry abuses while ensuring that subprime loans
are available to consumers with less-than-perfect credit histories. The
lawmakers said they hope the bill will serve as the primary House
vehicle for addressing mortgage lending and consumer protection issues,
the newswire reported.
Debtor’s Attorneys See Red in Senate Bill
Sweeping bankruptcy legislation passed by the Senate last week would
impose new requirements and new liability on debtor’s attorneys,
many of whom will decide that handling consumer bankruptcies is no
longer worth the risk, said practitioners and legal scholars, the
National Law Journal reported. Key provisions would
interfere with the attorney-client relationship, hike malpractice
premiums and overhead costs, and leave many low-income clients without
bankruptcy representation, according to the Journal. Read
the full article at
href='http://www.law.com/jsp/article.jsp?id=1110881110218'>www.law.com/jsp/article.jsp?id=1110881110218.
Fitch Report on Bankruptcy Reform Legislation Rating
Consequences
While likely to prompt a short-term spike upward in personal
bankruptcy filings and U.S. credit card chargeoff rates, the bankruptcy
reform legislation will have a neutral to moderately positive long-term
affect on collateral performance and rating volatility for credit card,
auto, and student loan ABS issues, Fitch Ratings announced in a press
release yesterday. Read the release at
href='http://biz.yahoo.com/bw/050315/155845_1.html'>biz.yahoo.com/bw/050315/155845_1.html.
WorldCom’s Ex-CEO Found Guilty
Former WorldCom Inc. CEO Bernard Ebbers was found guilty yesterday of
all nine criminal counts related to an accounting scandal that cost
investors billions of dollars, Reuters reported. The federal jury
returned its verdict on the eighth day of deliberations, convicting
Ebbers of fraud, conspiracy and filing false documents with securities
regulators. At his sentencing, set for June 13, Ebbers could face 85
years in prison.
Loral Value Higher Than Company Says
Loral Space & Communications Ltd. has undervalued some assets by
up to $463 million, an independent examiner found in a report that is
likely to boost the prospects for shareholders of the bankrupt satellite
operator, Reuters reported. The report, which was compiled by an
advisory firm led by former New York City Comptroller Harrison Goldin,
found that Loral and its advisors did “not fully capture
Loral’s value” in its reorganization plan, in effect
depriving some creditors of value.
Queen Mary Operator Seeks Chapter 11 Bankruptcy Protection
The operator of the Queen Mary ocean liner filed for chapter 11
bankruptcy protection yesterday in an effort to avoid the possible
termination of its lease with the City of Long Beach over $3.4 million
in disputed rent, the Los Angeles Business Journal
reported. The company made the filing in the U.S. Bankruptcy Court in
Los Angeles after months of attempting to persuade Long Beach officials
to apply rent credits the company claims it is owed by the city. The
company maintains it is owed credits from money it has spent renovating
and operating the landmark hotel, restaurant and entertainment
destination.
US Airways Wins More Financing, but with a Catch
US Airways Group Inc. will receive an investment of $125 million from
Republic Airways Holdings Inc. on the condition that the Arlington-based
carrier secure an additional $100 million before exiting bankruptcy
court protection, Republic said yesterday. The additional financing
requirement adds a fresh hurdle to US Airways’ plan to emerge from
chapter 11 proceedings on schedule by June 30, the Washington
Post reported. Read the full article at
href='http://www.washingtonpost.com/wp-dyn/articles/A38642-2005Mar15.html'>www.washingtonpost.com/wp-dyn/articles/A38642-2005Mar15.html.
Bush Won’t Unveil Plan Yet on Social Security
President Bush said today he would not unveil a legislative proposal
anytime soon on his plan to create private accounts for Social Security
because Congress would probably reject it, Reuters reported. Still, he
said in an interview with regional newspapers that he thought he could
get a deal by working with Congress to develop a consensus on
restructuring the retirement program.
Individuals Fail to Diversify Retirement Portfolios
Despite high-profile corporate downfalls, many retirement-plan
participants still hold huge amounts of their company’s stock, the
online Wall Street Journal reported. According to a study
by Greenwich Associates, a financial-services research firm in
Greenwich, Conn., employees in large defined-contribution
plans—typically those with more than $100 million in
assets—have nearly 23 percent of assets invested in their own
company's stock, the online newspaper reported.
Global Crossing Reports Fourth-quarter Loss
Global Crossing Ltd. today posted a fourth-quarter loss on weak
pricing for global networking services, Reuters reported. The company
posted a net loss of $28 million, compared with net income of $24.9
billion in the same period a year ago, when Global Crossing emerged from
bankruptcy.
Continental Sees Big Loss
Continental Airlines Inc. expects to post “a significant
loss” in 2005 and may have to furlough employees and sell planes
if workers do not ratify $500 million in wage and benefit cuts, the
carrier warned yesterday, Reuters reported. Continental said in a
regulatory filing that it could also face a cash crunch later this year
if fuel prices rise further or if unions reject the tentative pay cut
deal.