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October
31, 2007
Mortgage
Lending
name='1'>Representatives to Meet on Compromise for Mortgage
Modification Bankruptcy Bill
In the face of opposition
from the lending industry, House Judiciary Committee members are
attempting to work out a compromise over legislation introduced recently
that would make it easier for bankruptcy judges to modify home mortgages
that are on the verge of foreclosure,
size='3'>CongressDaily reported today.
Judiciary Chairman John Conyers (D-Mich.) said yesterday that he expects
to mark up the bill next week after he pulled it from the panel's
calendar last week in the face of resistance from Republicans and some
Democrats. Conyers said that bill sponsor Rep. Brad Miller
(D-N.C.) and Judiciary Commercial and Administrative Law Subcommittee
ranking member
size='3'>Chris Cannon (R-Utah)
are scheduled to meet this week in an attempt to reconcile their
differences over H.R. 3609. One possible compromise being discussed is
for the bill to sunset after three years.
name='2'>Commentary: Establishing Liability for Subprime
Fallout
One of the questions
facing lawmakers as a result of the subprime market fallout is whether
market discipline is enough to hold bad actors accountable or whether
the government needs to reinforce it, according to a
face='Times New Roman' size='3'>Washington Post
size='3'>editorial today. House Financial Services Committee Chairman
Barney Frank (D-Mass.) is working on a comprehensive bill that would
impose legal liability on the 'securitizers' of mortgage debt. Frank's
proposal would let borrowers sue issuers of bonds that are backed by 'no
doc' mortgages or other products that do not meet 'minimum standards for
reasonable ability to pay.' To those who suggest that this would chill
the mortgage-backed securities market, Frank notes that the proposed
penalties are not unduly onerous. Still, it is questionable if his cure
might hinder rather than help the industry's long-term recovery. The
bill does not yet clearly preempt state-law liability, meaning
securitizers would have to assume that Frank's proposed standards would
be a floor upon which states could pile additional requirements. The
vast majority of securitized subprime mortgages are still performing;
delinquencies are concentrated among loans that were made in the last
two years, when Wall Street's demand for new debt began to outstrip the
supply of capable borrowers -- and home prices stagnated.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/10/30/AR2007103001952.html'>Read
more.
name='3'>U.S.
face='Times New Roman' size='3'> Trustee Requests Examiner for
AHM
U.S. Trustee
Kelly Beaudin
Stapleton asked the
w:st='on'>
size='3'>Delaware
size='3'>bankruptcy court Monday to appoint an examiner to look into
suggestions of possible fraud at American Home Mortgage Holdings
Inc., Bankruptcy
Law360 reported yesterday. Stapleton also
asked the court to reject Allen & Overy LLP's application to counsel
the bankrupt lender, saying the firm is marred by potential conflicts of
interest. Allen & Overy represents Citibank in some matters
unrelated to the American Home bankruptcy, but Citicorp was also the
underwriter for the mortgage lender's May public offering that's
currently at the heart of securities class actions, Stapleton said.
Given that potential conflict of interest, Stapleton said she needed to
know more about the nature of the firm's representation of Citibank, the
percentage of its gross revenues derived from representing the bank and
whether the bank had put any restrictions on the firm's ability to take
positions adverse to it.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=38843'>Read
more. (Registration required.)
face='Times New Roman' size='3'>
name='4'>Delphi
size='3'> to Alter Bankruptcy Exit Plan
Auto parts maker Delphi
Corp said yesterday that the size of its bankruptcy exit financing
package would be reduced and several changes would be made to its
reorganization plan due to the roiling credit markets, Reuters reported
yesterday.
size='3'>Delphi
protection in October 2005 and expects to depart bankruptcy in the first
quarter of next year, said that its exit financing package would be
reduced by about $1.9 billion. The company also expects modification of
a $2.55 billion equity plan led by Appaloosa Management LP, although the
investors led by Appaloosa would still acquire $800 million of preferred
stock and $175 million of common stock. A $1.575 billion discount rights
offering would be open to unsecured creditors and eliminate the
participation of current stockholders.
face='Times New Roman' size='3'>Delphi
size='3'>said that the rights offerings would be conducted after the
reorganization plan is confirmed by creditors.
href='http://news.yahoo.com/s/nm/20071030/bs_nm/delphi_dc_1'>Read
more.
name='5'>Landlords Oppose Movie Gallery Closing Sales
A group of Movie Gallery
Inc.'s landlords, including Wal-Mart Inc., objected to the bankrupt
movie rental company's proposal to begin auctioning off many of its
leases and close its stores,
size='3'>Bankruptcy Law360 reported yesterday.
Wal-Mart, one of Movie Gallery's largest landlords, said that it should
have been consulted before the bankruptcy court gave Movie Gallery
permission to sell its leases. Most of the other landlords who objected
are smaller, local companies who leased commercial space to Movie
Gallery and voiced similar concerns. The court granted Movie Gallery
leave to sell its leases in an interim order handed down shortly after
the company declared bankruptcy.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=38783'>Read
more. (Registration required.)
name='6'>Ex-Chief of SEC Says Pension Funds in Danger
Former SEC Chairman
Arthur Levitt Jr. said in a speech yesterday that public pensions are at
risk as a result of conflicts of interest, opaque accounting practices
and a tendency among elected officials to promise valuable benefits,
then fail to set aside enough money to pay for them, the
face='Times New




















Roman'
size='3'>New York Times reported today.
“As the baby boomers begin to retire, we cannot tolerate a shaky
pension system,” he said. Levitt, who stepped down from the SEC in
2001, is now a senior adviser to the Carlyle Group, a large private
equities firm. The Carlyle Group is one of the investment firms to be
questioned by investigators in an inquiry into the
w:st='on'>
size='3'>New York
face='Times New Roman' size='3'>State
pension fund. Levitt alluded to that inquiry, which has
focused on whether associates of
w:st='on'>
size='3'>New York
face='Times New Roman'
size='3'>State
most recent former comptroller, Alan G. Hevesi, improperly benefited
from his sole direction of the $156 billion fund, the nation’s
second largest. However, Levitt said that
w:st='on'>New
York
the latest in a series of scandals at public funds all over the country,
including those in the cities of
face='Times New Roman' size='3'>Chicago
size='3'>,
size='3'>San Diego
w:st='on'>
size='3'>Philadelphia and the states
of
size='3'>Illinois
w:st='on'>Ohio
and
w:st='on'>
size='3'>California
size='3'>.
href='http://www.nytimes.com/2007/10/31/business/31sec.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
Los
Angeles-Area Hospital Files for Chapter 11
Los Angeles-area hospital
Brotman Medical Center Inc. has filed for bankruptcy protection in a bid
to cut costs and consolidate operations after its senior lender cut off
funding to the money-losing health care provider, the Associated Press
reported yesterday. The 420-bed hospital in
w:st='on'>Culver
City
face='Times New Roman' size='3'>Calif.
size='3'>, applied for chapter 11 protection Thursday in the U.S.
Bankruptcy Court in
w:st='on'>Los
Angeles
owned facility listed assets of $20.8 million and debts of $58.9
million. The hospital's emergency room will stay open and Brotman
said will continue to care for patients during its chapter 11
case. The hospital
owes unsecured creditors about $29.7 million.
href='http://www.forbes.com/feeds/ap/2007/10/30/ap4279604.html'>Read
more.
International
name='8'>Japanese Household Spending Jumps in
September
Japanese household spending
rose 3.2 percent in September compared with the same month in 2006,
although consumption deteriorated slightly on a quarterly basis,
MarketWatch.com reported yesterday. The increase was the most rapid pace
of spending by two-or-more-occupant households in three-and-a-half
years, the government said.
size='3'>The average household in the world's second-largest economy had
outlays of 281,000 yen ($2,450) in September, the second straight month
of expenditure gains after rising 1.6 percent in August, the Ministry of
Internal Affairs and Communications said. The ministry also said
size='3'>Japan's
unemployment rate rose to 4 percent in September from 3.8 percent in
August.
href='http://www.marketwatch.com/news/story/story.aspx?guid=%7B2874F298%2DCD93%2D4F05%2D9B86%2DD6CC79BE2D4C%7D&siteid=rss&print=true&dist=printTop'>Read
more.
href='http://www.marketwatch.com/news/story/story.aspx?guid=%7B2874F298%2DCD93%2D4F05%2D9B86%2DD6CC79BE2D4C%7D&siteid=rss&print=true&dist=printTop'>