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November
16, 2007
Housing/Mortgage
Lending
name='1'>House Passes Mortgage Reform Bill
The House of
Representatives passed a bill late yesterday aimed at protecting
borrowers from abusive home loans, but it faces a tougher future in the
Senate because of opposition by the mortgage industry and criticism from
the Bush administration, the Associated Press reported today. H.R. 3915,
the “Mortgage Reform and Anti-Predatory Lending Act of 2007”
passed the House by a vote of 291-127, with support from 64 Republicans
and no Democrats dissenting to the measure. The House bill would ban
lenders from making loans that borrowers can't repay, create a
nationwide licensing system for mortgage brokers and make Wall Street
banks that package mortgage securities into investments liable for
violations of lending laws. Senate Banking Committee Chair
size='3'>Chris
(D-Conn.) is planning to introduce a similar bill in the coming days.
The White House is critical of the bill but has not promised a veto.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/11/15/AR2007111502323_pf.html'>Read
more.
href='http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h3915eh.txt.pdf'>Click
here to read the text of H.R. 3915 as it passed the
House.
name='2'>NovaStar Shares Hammered on $600 Million Loss, Bankruptcy
Worries
NovaStar Financial Inc. shares
lost more than half their value yesterday after the mortgage lending
company reported losing almost $600 million in its third quarter and
raised the possibility of the company going bankrupt, the
Associated Press reported yesterday. Late Wednesday, NovaStar reported a
$598 million loss, much of it stemming from charges reflecting how much
value its portfolio of mortgage loans has lost. It also said that its
fate was in the hands of Wachovia Corp., to which it owes $83.9 million
in debt and $11.8 million in fees. The company, which estimated its cash
at $51.5 million, said that the bank has waived requirements that would
force the company to repay that debt immediately. However, those waivers
end Nov. 30 and there's not a guarantee in place that Wachovia will
extend them.
href='http://www.signonsandiego.com/news/business/20071115-1403-novastarfinancial-outlook.html'>Read
more.
w:st='on'>
name='3'>Florida
face='Times New Roman' size='3'> Homebuilder May Seek Bankruptcy
Protection
Florida-based homebuilder
TOUSA Inc. said yesterday that its third-quarter loss widened and it may
be forced to file for bankruptcy as the housing slump in
size='3'>Florida
the Associated Press reported yesterday. The company said that its
ability to remain solvent depends on restructuring to reduce debt in
exchange for equity. TOUSA reported a loss of $619.7 million, or $10.43
per share, versus a loss of $80 million, or $1.34 per share, in the
year-ago period. The latest quarter included a charge of $504.5
million.
href='http://rds.yahoo.com/_ylt=A9j8eu9gvTxHwvsAsQTQtDMD;_ylu=X3oDMTBjdmNoOTVjBHBvcwMyBHNlYwNzcg--/SIG=12aj12tef/EXP=1195249376/**http%3a//biz.yahoo.com/ap/071115/earns_tousa.html%3f.v=1'>Read
more.
name='4'>Student Lending
w:st='on'>
size='3'>Bill
face='Times New Roman'
size='3'>Passes
Committee
The House Education and
Labor Committee approved legislation yesterday designed to pressure
colleges into reining in tuition costs, streamline the student loan
process and crack down on sweetheart deals between lenders and
schools,
size='3'>CongressDaily reported yesterday.
H.R. 4137, which cleared the committee 45-0, would extend the more than
40-year-old Higher Education Act Program for another half-decade, its
first formal reauthorization since 1998. The bill is similar to the
Senate version of the reauthorization, which passed 95-0 in July. House
Education and Labor Chairman George Miller (D-Calif.) said that the bill
would address rising college prices and 'clean up the corruption' in the
student loan industry. Under the measure, colleges would have to report
their reasons for tuition increases and plans for lowering student
costs.
href='http://www.house.gov/apps/list/speech/edlabor_dem/rel111507.html'>Click
here to read Miller’s release on H.R. 4137.
Autos
face='Times New Roman' size='3'>
name='5'>Delphi
size='3'> Makes Key Changes to Reorganization
Plan
After reaching an
agreement with investors and General Motors, its former parent company,
bankrupt Delphi Corp. has amended its reorganization plan by reducing
its plan equity value and net funded debt from $7.1 billion to $5.2
billion, Bankruptcy
Law360 reported yesterday. The plan equity
value would also be reduced from $13.4 billion from $13.9 billion.
General Motors recovery was also lowered from $2.7 billion to $2.6
billion,
size='3'>Delphi
said that the disclosure statement hearing, which was adjourned
last month, is scheduled to resume on Nov. 29. It said proposed plan
investor Appaloosa Management LP had delivered a fully executed bid
letter to the company in connection with the revised investment
agreement amendment.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40210'>Read
more. (Registration required.)
size='3'>Federal-Mogul Set to Emerge from
Chapter 11
Judge Joseph H. Rodriquez
of the District Court of Delaware on Tuesday affirmed Federal-Mogul
Corp.'s fourth amended reorganization plan, paving the way for the
automotive parts supplier to emerge from chapter 11 before the end of
the year, Bankruptcy
Law360 reported yesterday. District court
approval was needed because the bankruptcy stemmed from asbestos claims.
The U.S. Bankruptcy Court for the District of Delaware confirmed the
reorganization plan on Nov. 8. Federal-Mogul had been pushing for
confirmation by the end of the year, when deals for $3.5 billion in exit
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=40206'>Read
more. (Registration required.)
Broadband Files for Chapter 11
Eagle Broadband Inc.
filed for chapter 11 listing assets of $2.7 million and liabilities of
$8.7 million, the Associated Press reported yesterday. Eagle Broadband,
which provides broadband and Internet protocol products and services,
filed its bankruptcy petition Wednesday in the U.S. Bankruptcy Court
in
size='3'>Galveston,
w:st='on'>
size='3'>Texas
Broadband's largest unsecured creditors include noteholders Dutchess
Private Equities Fund in
size='3'>Boston, which has a $2 million
claim, and
face='Times New Roman' size='3'>Manhattan
investment firm The Tail Wind Fund Ltd., which has a $1.3
million claim. The company is also liable for a $3.2 million court
judgment.
href='http://biz.yahoo.com/ap/071115/eagle_broadband_bankruptcy.html?.v=1'>Read
more.
Gallery to Delay Bankruptcy Exit
Movie Gallery Inc.'s
bankruptcy reorganization will take months longer to complete than the
company initially expected, the Associated Press reported yesterday. The
movie-rental company on Wednesday won final court approval to borrow
$150 million from Goldman Sachs Credit Partners to finance its chapter
11 reorganization. A judge also cleared the way for the company to
proceed with a $50 million stock-rights offering backed by Sopris
Capital Advisors, a private equity firm. However, Movie Gallery’s
chapter 11 plan will not be delivered to the U.S. Bankruptcy Court
in
size='3'>Richmond,
w:st='on'>
size='3'>Va.
mid-November deadline the company initially set for itself. That plan
won't be filed before Nov. 27, the company has told a judge. Moreover,
Movie Gallery doesn't expect to exit bankruptcy protection before the
second quarter of 2008.
href='http://biz.yahoo.com/ap/071115/movie_gallery_bankruptcy.html?.v=1'>Read
more.
Allows Seizure of Former Enron CEO’s Assets
U.S. District Judge Ewing
Werlein ruled that the government can proceed with its bid to seize
assets from Ken Lay's estate, denying a request from the Enron
chairman's widow to stop the effort, the
size='3'>Houston Chronicle reported yesterday.
The ruling allows the government to seek nearly $13 million from Lay's
estate, including the upscale condominium he and wife Linda Lay shared.
The judge wrote that prosecutors had provided 'ample allegations' of
criminal activity tied to the cash and property in question to pursue
its case. No trial or hearings have currently been scheduled on the
matter.
href='http://www.chron.com/disp/story.mpl/chronicle/5302617.html'>Read
more.
href='http://www.chron.com/disp/story.mpl/chronicle/5302617.html'>