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March 13, 2008
Mortgage
Lending
name='1'>Presidential Working Group to Recommend Revamp of Credit
and Lending Regulations
The nation's top economic
policy makers plan to release today their broadest blueprint yet for
avoiding a recurrence of the credit crunch now threatening the economy,
the Wall Street
Journal reported. Treasury Secretary Henry M.
Paulson said that the recommendations of the President's Working Group
on Financial Markets, which he leads, include strengthening state and
federal oversight of mortgage lenders and brokers. The group will also
recommend implementing what he termed 'strong nationwide licensing
standards' for mortgage brokers, a move that will probably require
legislation. The group also will propose directing credit-rating firms
and regulators to differentiate between ratings on complex structured
products and conventional bonds. In addition, it wants rating firms to
disclose conflicts of interest and details of their reviews and to
heighten scrutiny of outfits that originate loans that are enveloped by
various securities.
size='3'>Another recommendation from the panel is to push issuers of
mortgage-backed securities to disclose more about 'the level and scope
of due diligence' and about the underlying assets of the
securities.
href='http://online.wsj.com/article_print/SB120535743939031491.html'>Read
more. (Registration required.)
name='2'>Bill Proposed to Expand Federal Refinancing of Home
Loans
House Financial Services
Committee Chairman Barney Frank (D-Mass.) is expected to offer a plan
today that would provide federal backing to hundreds of thousands of
home loans, the New York
Times reported. The proposal would
significantly expand an effort already under way to refinance onerous
subprime mortgages with loans that are guaranteed by the Federal Housing
Administration. Like other proposals floated by banks and regulators,
Frank’s voluntary plan would allow mortgage companies to write
down the value of loans to their current market price before they are
refinanced and given FHA backing. Frank’s proposal comes on the
heels of statements by Federal Reserve chairman Ben S. Bernanke who said
that mortgage companies should write down the amount borrowers owe in
some cases. The Office of Thrift Supervision has also proposed creating
a financial certificate that would allow investors to write down the
value of loans in exchange for a share of the future increase in the
value of the home.
href='http://www.nytimes.com/2008/03/13/business/13mortgage.html?ref=business&pagewanted=print'>Read
more.
name='3'>Carlyle Capital Close to Financial
Collapse
Carlyle Capital Corp.
said late yesterday that it expects its lenders will seize its assets,
causing the likely liquidation of the fund, which until recently owned
$21.7 billion in mortgage securities, the
size='3'>Wall Street Journal reported today.
The news comes just one week after Carlyle Group began pleading with
some of the world's largest banks to hold off on margin calls and the
liquidation of its mortgage assets. Several of the lenders, led by
Deutsche Bank and J.P. Morgan Chase & Co. ignored Carlyle's request.
Wednesday night, they began selling the fund's assets, which were
committed as collateral against huge borrowings. By Monday, dealers had
sold $5.7 billion of the fund's assets. The fund said that through
yesterday it had defaulted on approximately $16.6 billion of its loans,
and expects to default on the rest.
href='http://online.wsj.com/article_print/SB120537974320632835.html'>Read
more. (Registration required.)
Hearing Focuses on Credit Cardholders’ Bill of Rights
Proposal
The House Financial
Services Subcommittee on Financial Institutions and Consumer
Credit will hold a hearing today titled “The Credit
Cardholders’ Bill of Rights: Providing New Protections for
Consumers.” The hearing will focus on
href='http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h5244ih.txt.pdf'>H.R.
5244, introduced by Subcommittee Chair Carolyn B. Maloney
(D-N.Y.), to end abusive credit card industry practices and provide
consumer protections to credit cardholders.
size='3'>The subcommittee will hear from consumers, legal and economic
experts, and credit card industry representatives.
href='http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr031308.shtml'>Click
here to view the witnesses and prepared testimony for the
hearing.
w:st='on'>
name='5'>Mississippi
w:st='on'>
size='3'> College
w:st='on'>
size='3'>School
face='Times New Roman' size='3'> of Law Captures National Moot
Court Title
The Mississippi College
School of Law overcame a tough challenge from the Southern Methodist
University Dedman School of Law to win the 16th Annual Chief Judge
Conrad B. Duberstein National Bankruptcy Memorial Moot Court
Competition. The competition, sponsored by ABI and
w:st='on'>
John’s
face='Times New Roman' size='3'>University
size='3'>School
Law, featured 44 teams from law schools around the country.
The ABI Endowment Fund provided the first-place team with
$5,000 and the second-place team with a $3,000 prize. The
University of Houston Law Center and a second team from the Mississippi
College School of Law each received $1,500 for their third-place
tie. The Emory University School of Law won $1,000 for the Best
Brief. Megan C. Connor, a student at the University of Miami
School of Law, won the $1,000 Best Oral Advocate award.
href='http://www.abiworld.org/AM/Template.cfm?Section=Home&CONTENTID=51198&TEMPLATE=/CM/ContentDisplay.cfm'>Click
here to read the press release.
name='6'>Creditors Want New Century Probe Sealed
New Century Financial Corp.'s
official creditors’ committee has asked a bankruptcy judge to seal
the results of a probe into the failed lender's finances until
mid-April, saying it needs more time to analyze the 550-page document,
the Associated Press reported yesterday. Veteran bankruptcy investigator
Michael J. Missal delivered his findings on New Century's accounting
missteps on Feb. 29, but only the judge and official bankruptcy
representatives have seen it. The contents of the report may be crucial
to New Century's creditors, who are expected to recover little from the
bankruptcy, unless they can find grounds to sue those responsible for
the company's collapse.
href='http://biz.yahoo.com/ap/080312/new_century_bankruptcy.html?.v=1'>Read
more.
name='7'>American LaFrance Alters Bankruptcy Plan
American LaFrance LLC,
the bankrupt maker of fire trucks and ambulances, filed an amended
reorganization plan and disclosure statement after creditors objected to
the initial proposal, Bloomberg News reported yesterday. Unsecured
creditors owed $58 million would get 17 to 30 percent of their claims
under the updated plan filed Tuesday in the U.S. Bankruptcy Court
in
size='3'>Wilmington,
w:st='on'>
size='3'>Del.
exclude recoveries from lawsuits. American LaFrance, in operation since
1832, sought chapter 11 protection Jan. 28. The Summerville, S.C.-based
company said it lost $104 million in the past two years as demand
slumped for emergency vehicles. American LaFrance, which has a plant
in
size='3'>Hamburg, listed
assets of $189 million in a Feb. 4 filing. The new disclosure statement
says secured claims total $176.4 million, including $22 million drawn
against financing approved by a bankruptcy judge.
href='http://www.buffalonews.com/145/story/297230.html'>Read
more.
face='Times New Roman' size='3'>
name='8'>Delphi
size='3'> Seeks to Avoid Infringement Action
Bankrupt auto parts maker
Delphi Corp. has asked a federal court to affirm that four patents for a
Passive Occupant Detection System, or PODS, are invalid and
unenforceable and that
size='3'>Delphi has not infringed
them,
size='3'>Bankruptcy Law360 reported yesterday.
Automotive Technologies International Inc. (ATI), which holds the
patents, has sued several major automakers for infringement. The
disputed patents disclose car-seat and child-seat detection and position
systems that incorporate a type of bladder ATI purportedly invented. ATI
accused Delphi of infringing a different PODS patent in 2003, but
size='3'>Delphi
dismissed from that suit with prejudice in October 2004 after a finding
of summary judgment. ATI's appeal of that ruling was stayed when
size='3'>Delphi
in 2005, and according to the docket the case was closed in June
2006.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=49864'>Read
more. (Registration required.)
In related news,
relations between auto supplier Delphi Corp. and its investors continue
to sour, leaving a bankruptcy reorganization in disarray weeks before it
is expected to close, the
size='3'>Wall Street Journal reported today.
The past few days have brought back-and-forth charges, with
size='3'>Delphi
illegal insider trading. Investors have resisted
w:st='on'>
size='3'>Delphi
its 29-month bankruptcy stay, charging that the Troy, Mich.-based
company is impatiently jumping into the troubled credit markets at their
expense. If the plan's investors walk away from or violate the deal
before April 4, they would pay a $250 million penalty. The allegations
of insider trading, if true, could spark the interest of the Securities
and Exchange Commission, which has put an emphasis on cracking down on
the practice during the past two years.
href='http://online.wsj.com/article_print/SB120536830896932081.html'>Read
more. (Registration required.)
Pope
& Talbot Wins Chapter 11 Exclusivity Extension
A federal judge has
extended lumber and pulp producer Pope & Talbot Inc.'s exclusive
right to file a chapter 11 liquidation plan through June 2, the
Associated Press reported yesterday. The Portland, Ore.-based company
said that it needs the added time to close the sale of its operating
units and negotiate terms of a liquidating plan with its creditors.
International Forest Products Ltd. (Interfor) won court permission Jan.
7 to buy three of the company's lumber mills and related assets for $69
million. On Feb. 12, the court approved the $105 million purchase of
Pope & Talbot's paper business by
w:st='on'>
size='3'>Indonesia
size='3'>'s PT Pindo Deli Pulp & Paper Mills, an affiliate of Sinar
Mas Group. The company has said that it expects the sales to close by
April 4.
href='http://www.chron.com/disp/story.mpl/ap/fn/5614346.html'>Read
more.
href='http://www.chron.com/disp/story.mpl/ap/fn/5614346.html'>