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November
7, 2007
Mortgage
Lending
name='1'>Mortgage Bill Could Lead to Spike in Chapter 13
Bankruptcies
As the House Judiciary
Committee is scheduled today to mark up a bill that would allow
bankruptcy judges to change some mortgage terms on a chapter 13 debtor's
primary residence, some experts believe that chapter 13 filing rates
would spike to record levels if the measure is passed, according to the
Associated Press. Mark Zandi, a chief economist of Moody's Economy.com,
told a House Judiciary subcommittee last week that he expects 2 million
home foreclosures over the next few years and that 500,000 of those
could be prevented if Congress passes H.R. 3609, sponsored by Rep. Brad
Miller (D-N.C.). ABI Executive Director
size='3'>Sam Gerdano said that the measure
could lead to a surge in chapter 13 filings for homeowners facing
foreclosure. “People should be asking pretty pointed questions on
what the impact will be, particularly if we're talking about 500,000,'
Gerdano said.
href='http://www.forbes.com/feeds/ap/2007/11/06/ap4308953.html'>Read
more.
href='http://judiciary.house.gov/schedule.aspx'>Click here to view
the House Judiciary Committee’s mark-up hearing scheduled for 1
p.m. ET today.
name='2'>House Panel Approves Lending Measure with Possibility of
Further Amendments
The House Financial
Services Committee approved legislation yesterday that would create a
national licensing standard for mortgage originators and impose
liability on investment firms that purchase, repackage and sell home
loans, but Financial Services Chairman Barney Frank (D-Mass.) vowed to
tinker with the bill to gain greater support before it comes to the
House floor next week,
size='3'>CongressDaily reported today. Frank
showed a willingness to work with some members as he searches to pick up
more votes before the measure comes to the floor. For example, Frank
said he would work with Rep. Gary Miller (R-Calif.) on his concerns to
narrow the scope of a practice known as yield spread premium, in which
mortgage brokers are eligible to receive fees from lenders for issuing a
loan with a higher interest rate than the minimum rate the borrower
could have qualified for. Frank also said that he would work with other
members on a possible time limit for tenants to vacate a property due to
a foreclosure resulting from a risky mortgage on the property. As the
bill heads to the House floor for a vote next week, lobbyists said that
Frank wants to get as close to 300 House votes in support to send a
strong message to the Senate to act on the bill. Senate Banking
Chairman
size='3'>Chris
released an outline of what he wants in an anti-predatory lending bill,
but has not currently introduced a bill on the issue.
name='3'>IndyMac Swings to Loss as Past-Due Loans
Jump
IndyMac Bancorp Inc.
posted a wider-than-expected third-quarter loss as surging bad loans
forced the company to pump up credit reserves by 47 percent, the
Wall Street Journal
reported today. IndyMac -- the ninth-largest
size='3'>U.S.
lender by volume, according to trade publisher Inside Mortgage Finance
-- posted a net loss of $202.7 million, more than five times wider than
the
size='3'>Pasadena,
w:st='on'>
size='3'>Calif.
had projected two months ago but much smaller than the $1.2 billion
third-quarter loss posted by its bigger rival, Countrywide Financial
Corp. IndyMac Chief Executive Michael Perry blamed a sharp jump in
past-due loans in September, including both home mortgages and loans to
home builders. 'Delinquency trends in September rose sharply versus even
August at IndyMac and for the industry,' he said, singling out
'piggyback' loans. He said that some of the second-lien loans had to be
written off.
href='http://online.wsj.com/article/SB119435255388983839.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='4'>Democrats Split over Tax Measure Targeting Hedge
Funds
Democrats are divided on
a tax bill that would increase taxes on hedge fund and private-equity
industries by nearly $50 billion in order to stave off growth of the
alternative minimum tax for a year, offer new tax breaks to middle-class
homeowners and expand tax rebates for low-income parents, the
Washington Post
reported today. As the bill is likely to be voted out of
the House this week, it faces much more difficult prospects in the
Senate. By taxing investment management services as ordinary income, not
capital gains, the nonpartisan Joint Committee on Taxation estimates
that the Treasury could bring in an additional $26 billion over the next
decade. The second measure in the House bill would shut down fund
managers' abilities to shift compensation to offshore tax havens and
defer tax payments on that money for years. Closing that loophole would
reap the Treasury nearly $23 billion through 2017.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/11/06/AR2007110602313_pf.html'>Read
more.
face='Times New Roman' size='3'>New
Jersey
size='3'>Battle
Bankruptcy Court over $100 Million Project
A bankruptcy court battle
is brewing as a pair of
size='3'>New Jersey real estate
developers square off over the rights to a contested development project
in southern
face='Times New Roman' size='3'>New
Jersey
$100 million, the Associated Press reported yesterday. The dispute,
outlined in papers filed Monday in the U.S. Bankruptcy Court of Camden,
N.J., centers on a site called Medford Crossings in
w:st='on'>
size='3'>Medford
w:st='on'>
size='3'>N.J.
people located 20 miles east of
w:st='on'>
size='3'>Philadelphia
281-acre development, which has been entangled in litigation for over a
decade, was placed into chapter 11 last month by the project's
developers, Freedman Cohen Development LLC. However, property owner
Stephen D. Samost, who agreed to sell a portion of the land and
development rights to Freedman Cohen in 2005 for $60 million, said that
the
size='3'>Cherry Hill
developer missed an Oct. 31 deadline to close on the deal. Samost claims
that the chapter 11 filing was made in bad faith and is asking a
bankruptcy judge to lift the automatic stay in the case so the
development can move forward.
href='http://biz.yahoo.com/ap/071106/developers_bankruptcy.html?.v=1'>Read
more.
name='6'>Twinkie Maker Files Reorganization Plan
Just days before a
bankruptcy court showdown with its largest union, Interstate Bakeries
Corp. has filed a reorganization plan for ending more than three years
of bankruptcy, the Associated Press reported yesterday. The Kansas
City-based maker of Hostess Twinkies and Wonder Bread filed the plan
late Monday, saying that it has lined up $400 million in financing from
specialty lender Silver Point Finance LLC and has received initial
approval from 95 percent of the holders of the company's pre-petition
debt. The plan, subject to court approval, effectively stymies an
attempt by Yucaipa Cos., the Los Angeles-based investment firm of
supermarket billionaire Ron Burkle, to buy Interstate Bakeries. Burkle
sought to buy the company with help from the
w:st='on'>
size='3'>U.S.
size='3'>subsidiary of Mexican baking competitor Grupo Bimbo and the
International Brotherhood of Teamsters. Interstate Bakeries now has
until Jan. 7 to persuade its creditors to approve the plan.
href='http://biz.yahoo.com/ap/071106/interstate_bakeries_reorganization.html?.v=1'>Read
more.
size='3'>U.S. Spar over Costs
at
size='3'>Site
Asarco LLC and the U.S.
Department of Justice have filed briefs following an October hearing on
environmental cleanup costs at
face='Times New Roman' size='3'>Idaho
size='3'>'s
face='Times New Roman' size='3'>Coeur d'Alene
size='3'>Basin
each side asking the court overseeing the bankrupt mining company's
chapter 11 proceedings to accept different estimates of Asarco's
liability, Bankruptcy
Law360 reported yesterday.
face='Times New Roman' size='3'>DOJ asked the court to overrule any
objections to its $2.6 billion claim for the basin, which includes more
than $184 million in past costs and almost $2.4 billion in future costs.
Asarco said that the government's claims for the basin were
“greatly exaggerated and based on incorrect assumptions,”
according to its brief also filed on Monday. Asarco's liability for the
site shouldn't exceed $122.5 million, according to the company.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39371'>Read
more. (Registration required.)
name='8'>Asbestos Claimants File Plan in W.R. Grace Chapter 11
Case
Less than five months after a
bankruptcy judge terminated chemical manufacturer W.R.
face='Times New Roman'>Grace & Co.'s exclusivity
period, asbestos claimants in the chapter 11 case have filed their own
version of a reorganization plan,
size='3'>Bankruptcy Law360 reported yesterday.
The newly proposed plan, filed on Monday evening, is based on the
premise that Grace's asbestos liabilities may run well past $4 billion,
which would possibly make it nearly impossible for the company to find
financing. The claimants have criticized Grace's previous plan, filed in
2005, for seeking to cap the company's asbestos liabilities —
including future demands — at $1.6 billion. If the court
determines the liabilities to be higher, the plan makes no provision for
the difference, the claimants argued.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39441'>Read
more. (Registration required.)
name='9'>Within the Fed, Resistance to Further Rate
Cuts
Even if the economy slows
sharply in the final quarter of this year, some policy makers at the
Federal Reserve are opposed to cutting rates again at their next meeting
in December, the New
York Times reported today. Charles I. Plosser,
the president of the Federal Reserve Bank of
w:st='on'>
size='3'>Philadelphia
that he already expected growth to slow to an annual pace of 1.5 percent
or less, but that he would not support another rate cut unless the
slowdown appeared to be even sharper than that. “The key here is
that growth would have to be less than the forecast to cut rates
again,” Plosser said. Fed Governor Frederic S. Mishkin also said
that the risk of slowing economic growth was roughly
“balanced” against the risk of rising inflation and that the
two rate cuts in August and September “should help
forestall” a more serious slowdown.
href='http://www.nytimes.com/2007/11/07/business/07fed.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
href='http://www.nytimes.com/2007/11/07/business/07fed.html?_r=1&oref=slogin&ref=business&pagewanted=print'>