href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />
January 15, 2008
Mortgage
Lending
name='1'>Lender Group Warns Against Altering Bankruptcy
Laws
The Mortgage Bankers
Association said that legislation to allow bankruptcy judges to modify
the terms of primary residence mortgages for chapter 13 debtors could
increase interest rates on all future mortgages between 1.5 and 2
percentage points, Dow Jones Newswires reported yesterday. MBA cautioned
yesterday that such a change to bankruptcy laws would be costly as it
would create uncertainty for lenders, who would require higher down
payments and other fees. 'The total cost of foreclosure is much greater
than that associated with a chapter 13 bankruptcy, and there is no
evidence that allowing high-risk mortgage loans to be modified in
bankruptcy would increase interest rates for homeowners generally,' said
Rep. Brad Miller (D-N.C.), the sponsor of H.R. 3609. The House Judiciary
Committee passed Miller's bill in December, and the measure is one of a
number of housing-related bills the House could consider in the coming
months to help deal with the turmoil in the mortgage markets.
href='http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20080114%5cACQDJON200801141714DOWJONESDJONLINE000697.htm&'>Read
more.
name='2'>Citigroup Posts $9.83 Billion Loss on Mortgage
Woes
Citigroup announced a
steep cut in its stock dividend and another big investment by foreign
investors today after taking another big write-down related to subprime
securities and posting a $9.83 billion loss for the fourth quarter,
the New York
Times reported today. Beginning what is
expected to be a grim week for financial company earnings, Citigroup
said it was writing down $18.1 billion because of soured
mortgage-related investments. Citigroup CEO Vikram S. Pandit said that
the company would eliminate 4,200 jobs and cut its dividend by 41
percent, to 32 cents from 54 cents a share in an effort to shore up its
operations.
href='http://www.nytimes.com/2008/01/15/business/16citi.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='3'>U.S.
face='Times New Roman' size='3'> Trustee Objects to American Home's
Auction Plan
U.S. Trustee
Kelly Beaudin
Stapleton opposed American Home Mortgage
Holdings Inc.’s request to switch from its earlier plan to hold an
open auction for some of its assets to a sealed bid process,
Bankruptcy Law360
reported yesterday. Stapleton protested that she only
learned of the plans to abandon an open auction on Thursday, when the
debtors' counsel informed her. AMH made this decision, she said, after
consultations with Bank of America NA, which is AHM's administrative
agent, J.P. Morgan Chase Bank NA, and the unsecured creditors’
committee. Stapleton also objected to AHM's proposal to provide expense
reimbursements to bidders for bids in each of three loan pools worth up
to $150 per loan, assuming that figure is not greater than 1 percent of
the loan.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=44011'>Read
more. (Registration required.)
w:st='on'>
name='4'>Baltimore
face='Times New Roman' size='3'> Finds Subprime Crisis to be
Snagging Women
An analysis of public
records by the Reinvestment Fund, a nonprofit community development
organization, has found that more than half of the foreclosures for each
of the last four years in
w:st='on'>
size='3'>Baltimore
size='3'>’s Belair-Edison
size='3'>neighborhood have been homes owned primarily by women,
the New York
Times reported today. The foreclosures
highlight a broader dimension of the housing meltdown: subprime
mortgages, which are driving the foreclosure rate, have gone
disproportionately to women. Single women have been among the
fastest-growing groups of homeowners in recent years, and in
size='3'>Baltimore
accounted for 40 percent of home sales in 2006, twice the national
average, according to the National Association of Realtors. Nearly half
of these mortgages were subprime, National Community Reinvestment
Coalition found.
href='http://www.nytimes.com/2008/01/15/us/15mortgage.html?_r=1&ei=5088&en=00f3b9bc6eccbbac&ex=1358139600&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print'>Read
more.
name='5'>Levitt Receives Loan to Finish Homes in the
Southeast
Home builder Levitt &
Sons received approval yesterday to tap a $3.5 million loan to finish
building homes across the Southeast, Dow Jones Newswires reported
yesterday. Bankruptcy Judge
size='3'>Raymond B. Ray gave interim approval
for Levitt & Sons to borrow up to $3.5 million from Wachovia Bank,
court documents showed. Levitt asked for the funds to resume
construction that was halted by its bankruptcy filing in November.
Levitt’s agreement with Wachovia directs the home builder to use
proceeds from any home sales to repay Wachovia for the bankruptcy loan.
Remaining proceeds will be used to pay back lenders.
Orders Probe in Tersigni Chapter 11
The federal judge
overseeing L. Tersigni Consulting's bankruptcy case has ordered an
investigation into possible fraud and overbilling by the company, the
latest court to demand an inquiry into its work, the Associated Press
reported yesterday. Bankruptcy Judge Alan H.W. Shiff last week ordered
an examiner to investigate the company's billing practices, which have
drawn scrutiny in major bankruptcy cases. The inquiry will also look
into 'any fraud, dishonesty, incompetence or gross mismanagement of the
affairs' of L. Tersigni by management, according to court documents
filed in the case. Courts in
face='Times New Roman' size='3'>New Jersey
size='3'>,
size='3'>Delaware
size='3'>Pittsburgh
ordered the appointment of examiners in several bankruptcy cases in
which L. Tersigni was involved, including W.R. Grace & Co. and
Federal-Mogul Corp. L. Tersigni has said in
court papers that there has been no finding that it overbilled clients
and that an earlier investigation by the Justice Department resulted in
no charges.
href='http://www.forbes.com/feeds/ap/2008/01/14/ap4528568.html'>Read
more.
name='7'>Noteholders Urge Judge to Reject
w:st='on'>
size='3'>Delphi
Plan
A group of institutional
investors asked a judge to reject Delphi Corp.'s chapter 11 plan, saying
that it delivers an unacceptable 'windfall' to an investor group led by
hedge fund Appaloosa Management LP, the
size='3'>Wall Street Journal reported today.
The group said that senior noteholders, owed about $2.3 billion, are
likely to vote against the plan and have accused
w:st='on'>Delphi
voting scheme designed to 'rig' balloting and win support from creditors
despite the noteholders' objections.
face='Times New Roman' size='3'>Delphi
size='3'>is set to begin hearings to confirm its bankruptcy plan on
Thursday.
size='3'>Delphi
bankruptcy protection in October 2005, needs to secure the debt
financing to supplement a $2.5 billion equity investment from an
investor group led by Appaloosa Management.
href='http://online.wsj.com/article_print/SB120036629325890375.html'>Read
more. (Registration required.)
name='8'>Shareholders Claim Calpine Chapter 11 Plan Diminishes
Value
A group of shareholders
in Calpine Corp., unhappy with the bankruptcy court's decision to
approve Calpine's chapter 11 plan, is claiming that the company's
reorganization plan undervalues the debtors by billions of
dollars, Bankruptcy
Law360 reported yesterday.
face='Times New Roman'>Compania International Finceria
SA, Coudree Global Equities Fund, Standard Bank of
w:st='on'>
size='3'>London
Leonardo Capital Fund SPC filed reply papers yesterday in support of
their Dec. 31 motion for reconsideration of the confirmation order, as
well as the court's second modification order. Calpine's sixth amended
plan “undervalues the debtors by billions of dollars, fails to
meet the standards required for confirmation, results in creditors being
paid more than in full and unnecessarily strips significant value from
shareholders,” according to the objecting shareholder's
filing.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=43977'>Read
more. (Registration required.)
Molecular Files for Chapter 11
Polar Molecular Corp.,
the Denver-based maker of fuel additives for cars and industrial
machinery, filed for bankruptcy protection from its creditors, Bloomberg
News reported yesterday. Polar listed assets of more than $400 million
and debt of $5.12 million in its chapter 11 petition filed Friday in
U.S. Bankruptcy Court in
w:st='on'>
size='3'>Denver
closely held company's primary product is marketed to fleet and marine
operators under the name DurAlt FC. The additive purports to reduce
combustion-chamber deposits and alter octane requirements in engines.
Republic Financial holds the biggest unsecured claim in the case at
$531,000, according to court papers.
name='10'>Delta Aims for Swift Merger with Northwest or
United
Delta Air Lines Inc. has
opened merger negotiations with both UAL Corp.'s United Airlines and
Northwest Airlines Corp., and hopes to negotiate a merger agreement with
one of the airlines over the next two weeks, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Delta executives, who completed a round of
preliminary discussions with United and Northwest before seeking board
permission for formal talks, plan to move swiftly and present the
preferred partner to Delta directors when they next meet in early
February. A deal could be announced as early as mid-February.
href='http://online.wsj.com/article_print/SB120037278651790801.html'>Read
more. (Registration required.)
name='11'>Greenspan to Join Hedge Fund as an Adviser
Former Federal Reserve
Chairman Alan Greenspan is signing on as an adviser to hedge-fund firm
Paulson & Co., the
size='3'>Wall Street Journal reported today.
It is the third consulting contract Greenspan has signed since leaving
the Fed after 18 years as chairman in January 2006 and establishing his
own company, Greenspan Associates. He reached similar agreements with
Pacific Investment Management Co., which manages more than $700 billion,
mostly in fixed-income assets, and
w:st='on'>
size='3'>Germany
size='3'>'s Deutsche Bank AG last year. Greenspan has said he would only
consult with one client in each industry, and thus Paulson, with assets
of $28 billion, is the only hedge fund he will work for directly. All
three of his clients have profited from a bearish view on housing and
mortgages.
href='http://online.wsj.com/article_print/SB120036783112890507.html'>Read
more. (Registration required.)
href='http://online.wsj.com/article_print/SB120036783112890507.html'>