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November
14, 2007
Mortgage
Lending
name='1'>House to Consider Home Mortgage Reform
Legislation
The House Rules Committee will
meet today at 2 p.m. ET in preparation for H.R. 3915, the
'Mortgage Reform and Anti-Predatory Lending Act of 2007,' to be
considered on the House floor Thursday and Friday. Provisions
in the bill would amend the Truth in Lending Act to reform consumer
mortgage practices and provide accountability for such practices, to
establish licensing and registration requirements for residential
mortgage originators, and to provide certain minimum standards for
consumer mortgage loans.
href='http://www.rules.house.gov/110/text/110_hr3915txt.pdf'>Click
here to view the bill text as reported from the House Financial
Services Committee.
face='Times New Roman' size='3'>
name='2'>California
size='3'>,
size='3'>Ohio
w:st='on'>
size='3'>Florida
Third Quarter Foreclosure Rates
RealtyTrac Inc. reported
today that California, Ohio and Florida had more than two-thirds of the
25 cities with the nation's highest foreclosure rates during the third
quarter, as the credit crunch and falling home values hit homeowners,
according to the Wall
Street Journal today. Early this month,
RealtyTrac of Irvine, Calif., said third-quarter foreclosure filings
surged 30 percent nationally from the second quarter and nearly doubled
from a year earlier, with one foreclosure filing for every 196
size='3'>U.S.
size='3'>households. Third-quarter filings were up from a year ago in 45
states. Among the nation's 100 largest metropolitan areas,
size='3'>Stockton
w:st='on'>
size='3'>Calif.
w:st='on'>
size='3'>Detroit
Bernardino,
face='Times New Roman'
size='3'>Calif.
the highest third-quarter foreclosure rates, the company said.
size='3'>Stockton
filing for every 31 households,
w:st='on'>
size='3'>Detroit
for every 33 households, and Riverside-San Bernardino had one for every
43 households. Riverside-San Bernardino also had the most foreclosure
filings overall -- 31,661 -- followed by
w:st='on'>Los
Angeles
w:st='on'>
size='3'>Detroit
w:st='on'>
size='3'>Atlanta
href='http://online.wsj.com/article/SB119503718058992677.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
name='3'>Mortgage Lenders Network Settles with Four
States
Mortgage Lenders Network
USA Inc. has struck settlements with four state banking departments,
avoiding possible million-dollar penalties for lending violations it
allegedly committed before filing for bankruptcy,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. In a stipulation filed on Monday, Mortgage
Lenders said it will pay $845,000 to the Connecticut Department of
Banking and $10,000 to the New Hampshire Banking Department. The debtor
also agreed to surrender its mortgage lender licenses in
size='3'>Michigan and cease its
mortgage broker operations in
w:st='on'>
size='3'>Ohio
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39958'>Read
more. (Registration required.)
name='4'>Judge to Allow AHM's Fraud Suit
Jose L. Linares of the U.S.
District Court for the District of New Jersey on Thursday refused to
dismiss a fraud case brought by bankrupt lender American Home Mortgage
Co. against property title insurance underwriter First American Title
Insurance Co. arising from its alleged participation in the New Jersey
Affordable Homes fraud scheme, Bankruptcy Law360 reported
yesterday. Judge Linares ruled that AHM’s complaint should not be
dismissed for failure to join necessary and indispensable parties, as
First American had claimed. The case arises from an alleged Ponzi scheme
perpetrated by now-bankrupt real estate investment company New Jersey
Affordable Homes Corp. and its president, Wayne Puff. AHM was among the
individuals and institutions that invested funds with NJAH in return for
mortgages on properties. First American underwrote the title insurance
for AHM’s deals with NJAH, according to court documents.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=39928'>Read
more. (Registration required.)
name='5'>Bank of
w:st='on'>
size='3'>America
size='3'>Expects $3 Billion Housing Debt
Write-Down
Bank of America Corp, the
second-largest U.S. bank, said yesterday that it expects to write down
$3 billion of debt in the fourth quarter as fallout from the nation's
housing slump deepens, Reuters reported yesterday. The pretax loss stems
from collateralized debt obligations (CDOs), including those tied to
subprime mortgages, and may increase if market conditions worsen, Bank
of
face='Times New Roman'
size='3'>America
size='3'>CFO Joe Price said. Bank of America also expects to set aside
$600 million to help money market mutual funds exposed to risky debt
maintain the $1 per share net asset value that all such funds try to
keep. It is also writing down $300 million for a troubled investment,
and setting aside more money for other housing-related losses, including
href='http://www.nytimes.com/reuters/business/business-bankofamerica-writedowns.html?pagewanted=print'>Read
more.
name='6'>HSBC Takes $3.4 Billion Charge on
w:st='on'>
size='3'>U.S.
size='3'>Mortgage Business
HSBC Holdings PLC said
that it will take a $3.4 billion charge against third-quarter profits
because of accelerating losses at its HSBC Finance Corp. mortgage
business in the
w:st='on'>United
States
Associated Press reported today. That is $1.4 billion
size='3'>(960 million euros) more than expected
based on first-half trends, and the bank said it was shutting another
260 branches in the
w:st='on'>
size='3'>U.S.
size='3'>consumer finance division. HSBC warned that the subprime crisis
could deepen and said that further volatility as a result of the credit
crunch was ''more than a remote possibility.'' The 2.3 billion-euro
charge follows last year's $10.6 billion bad debt exposure, which led to
HSBC's first-ever profit warning.
href='http://www.nytimes.com/aponline/business/AP-Britain-HSBC.html?ref=business&pagewanted=print'>Read
more.
name='7'>Calpine Strikes $53 Million Deal with
Creditors
Calpine Corp. has reached a
$53.7 million settlement with a group of creditors of its Calpine
Generating Co. unit, resolving a dispute that could have delayed the
power company's exit from bankruptcy protection, the Associated Press
reported yesterday.
size='3'>Calpine, which could lose a favorable $8 billion
bankruptcy-exit loan if it doesn't emerge from chapter 11 protection by
the end of January, said that the settlement with the first-priority
debtholders of its CalGen power generating unit will 'expedite the
confirmation process by reducing the potential for delays as a result of
the ongoing litigation.' Calpine's deal, outlined in papers filed Friday
in the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
the creditors' fight for damages and default interest payments. The
settlement, which is subject to bankruptcy court approval, would give
the first-priority debtholders a $20.9 million unsecured damages claim
in Calpine's chapter 11 case that would accrue interest at the federal
judgment rate from the date of the repayment of the CalGen debt.
href='http://biz.yahoo.com/ap/071112/calpine_bankruptcy.html?.v=1'>Read
more.
Autos
name='8'>U.S.
face='Times New Roman' size='3'> Trustee Objects to Dura's Chapter
11 Plan
With less than a month to
go before its chapter 11 plan confirmation hearing, U.S. Trustee
Kelly Beaudin
Stapleton objected to Dura Automotive Inc.'s
blueprint for exiting bankruptcy, arguing that the plan contains overly
broad release provisions and discriminates against certain
creditors, Bankruptcy
Law360 reported yesterday. In her objection,
Stapleton said that the releases contemplated in Dura's plan grant
various entities, which have made no contribution to the plan and have
no “identity of interest” with the debtors, broad releases
related to both pre-petition and post-petition conduct. Dura's plan
seeks to exculpate nonfiduciaries. The objection also accuses Dura of
inappropriately seeking substantive consolidation for plan purposes,
arguing that the debtors are perfectly capable of presenting
nonconsolidated claims information and financial information.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40008'>Read
more. (Registration required.)
name='9'>Tower Settles
w:st='on'>
size='3'>Michigan
Claims
The trust representing
Tower Automotive Inc. following its July emergence from chapter 11 has
resolved the state of
w:st='on'>
size='3'>Michigan
claims against it,
size='3'>Bankruptcy Law360 reported yesterday.
Three claims by the Michigan Department of Treasury are all to be
classified by the comparatively high designation of priority tax claim,
with each referring to a different Tower entity. The state of
size='3'>Michigan
receive a $46,799.00 priority tax claim against Tower Automotive
Michigan LLC; a $19,096 priority tax claim against Tower
Automotive Plymouth Inc.; and a
$32,645.00 priority tax claim against Tower Automotive Products Co. A
hearing on the settlement has been scheduled for Nov. 26.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39977'>Read
more. (Registration required.)
Program Criticized by Senators on Fraud Oversight
A massive fraud in a
Small Business Administration loan program sparked stinging criticism
yesterday from senators who charged that SBA was lax in oversight to
prevent abuses,
size='3'>CongressDaily reported yesterday. The
criticism came as the Senate Small Business Committee scrutinized a
scheme involving $76 million in SBA-guaranteed loans made by Business
Loan Express, also called BLX, one of SBA's 10 largest lenders. Patrick
Harrington, a former BLX vice president in the
w:st='on'>
size='3'>Troy
w:st='on'>
size='3'>Mich.
18 others were arrested in a federal law enforcement sweep in January.
Harrington, facing up to 10 years in prison, has pleaded guilty and is
expected to be sentenced in January to one conspiracy count and another
of lying to a federal grand jury. The alleged fraud, which could be the
biggest in SBA history, involved faking the creditworthiness of would-be
recipients of SBA-backed loans. Some of the strongest criticism came
from SBA Inspector General Eric Thorson, who testified that BLX had a
history of defaulted loans that had to be honored by the federal
government. 'Quite simply, SBA did not hold the lender accountable for
its performance problems,' Thorson said, and he added that SBA 'has been
slow to develop its lender oversight program.'
Fight Delays Divorce Lawyer's Discharge from Bankruptcy
While divorce lawyer
Elliot Gourvitz's bankruptcy is nearly over since a settlement has
resolved most creditors' claims and a trustee's action to block the
discharges has been resolved, his largest unsecured creditor -- the law
firm that represented his former secretary in a discrimination suit
— is pressing a claim for legal fees that must be resolved before
the discharge is final, the
size='3'>New Jersey Law Journal reported on
Monday. Though the
firm of Barry, McTiernan & Wedinger is entitled to roughly $75,000
under the current settlement, it claims Gourvitz owes it at least
$50,000 more in fees for the discrimination case, plus fees incurred in
the bankruptcy. Partner Richard Wedinger says the Edison, N.J., firm
will continue trying to block the bankruptcy discharge under 11 U.S.C.
523(a)(6), which denies discharge of a debt 'for willful and malicious
injury.'
href='http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1194602648651'>Read
href='http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1194602648651'>
size='3'>Bankrupt Art Gallery Seeks to Borrow
$1.7 Million
Lawrence B. Salander requested
to borrow $200,000 to cover attorney fees, while his Salander-O'Riley
Galleries LLC sought permission last week to borrow up to $1.5 million
to fund its business operations, according to bankruptcy court filings
on Friday, the Associated Press reported yesterday. Salander and the art
gallery entered bankruptcy earlier this month amid allegations that the
gallery didn't pay for artwork consigned to it. Salander-O'Riley
Galleries still owes First Republic Bank $25.3 million under an existing
href='http://biz.yahoo.com/ap/071113/art_gallery_bankruptcy.html?.v=1'>Read
href='http://biz.yahoo.com/ap/071113/art_gallery_bankruptcy.html?.v=1'>
name='13'>Supreme Court to Tackle Paralegals' Fees
The U.S. Supreme Court
yesterday agreed to weigh in on the rate at which paralegals' fees may
be assessed against the
w:st='on'>
size='3'>U.S.
size='3'>government in adversarial and administrative proceedings, and
more broadly to provide guidelines on how much plaintiffs can recover
for the costs of paralegals' services, Bankruptcy Law360
reported yesterday. The High Court granted a
size='3'>writ of certiorari to
face='Times New Roman' size='3'>Richlin Security Service Co. v.
Chertoff, which was requested after the U.S.
Court of Appeals for the Federal Circuit in April denied Richlin's
request for a rehearing. The case centers on the question of whether
paralegals' fees are akin to attorneys' fees, and therefore to be
assessed with an eye toward what the client paid for them, or whether
they are more like related costs, and therefore to be assessed with an
eye toward what the lawyer or law firm paid for them.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40025'>Read
more. (Registration required.)
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40025'>