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October
11, 2007
face='Times New Roman'
size='3'>Alliance Looks to Help
Struggling Homeowners
Treasury Secretary Henry
Paulson and HUD
Secretary Alphonso
size='3'>Jackson yesterday
announced the creation of
a private sector-led partnership to try to help struggling homeowners
make mortgage
payments,
size='3'>CongressDaily
size='3'>reported yesterday. The move comes amid calls for the
administration to take more
steps to address the lending crisis, including a demand last week by
Democratic leaders for
President Bush to appoint a 'mortgage czar.' Paulson and
w:st='on'>
size='3'>Jack
size='3'>son unveiled the HOPE NOW alliance of credit counselors,
mortgage servicers and
others that will explore ways for the industry to assist homeowners at
risk of default.
Paulson cautioned against 'across-the-board modifications' that could
dampen lending in the
future. 'When you're talking about bankruptcy and modifying contracts,
then you're dealing
with something that, in order to try to help a current situation, may
very much impede
future financing in a mortgage market that has been the envy of the rest
of the world,'
Paulson said. He minimized the importance of increasing loan portfolios
for government
sponsored enterprises like Fannie Mae and Freddie Mac, as backed by some
href='http://www.treasury.gov/press/releases/hp599.htm'>Click here
to read
Paulson’s statement on the creation of the HOPE NOW
alliance.
name='2'>Analysis: Subprime
Loans Permeated Throughout the Nation
An analysis of more than
130 million home
loans made over the past decade reveals that risky mortgages were made
in nearly every
corner of the
w:st='on'>United
States
not just to low-income, urban borrowers, the
size='3'>Wall Street Journal reported today.
The analysis of loan
data by the Wall Street
Journal
indicates that from 2004 to 2006, when home prices peaked
in many parts of
the country, more than 2,500 banks, thrifts, credit unions and mortgage
companies made a
combined $1.5 trillion in high-interest-rate loans. High-rate mortgages
accounted for 29
percent of the total number of home loans originated last year, up from
16 percent in 2004.
About 10.3 million high-rate loans were made in the past three years,
out of a total of 43.6
million mortgages. High-rate lending jumped by an even larger percentage
in 68 metropolitan
areas, from
size='3'>Lewiston,
w:st='on'>
face='Times New Roman' size='3'>Maine,
to
w:st='on'>
size='3'>Ocala
size='3'>,
size='3'>Fla., to
w:st='on'>
w:st='on'>
size='3'>Tacoma
size='3'>,
href='http://online.wsj.com/article/SB119205925519455321.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
w:st='on'>
face='Times New Roman' size='3'>
name='3'>Pennsylvania
face='Times New
Roman' size='3'>J udge Halts Higher Mortgage Bills Stemming from Broker
Bankruptcy
face='Times New Roman'
size='3'>Berks
face='Times New Roman'
size='3'>County (
w:st='on'>
size='3'>Pa.) Judge
Jeffrey Sprecher is
temporarily blocking higher mortgage bills facing more than 800
homeowners affected by last
month's bankruptcy filing by mortgage broker OPFM Inc. and its five
subsidiaries, the
Associated Press reported today. Judge Sprecher issued a temporary
injunction yesterday that
allows the homeowners to pay the amount of the original mortgages they
signed with OPFM. The
company filed for chapter 7 on Sept. 15 along with its subsidiaries
Image Masters,
Discovered Treasures, Dividit, Mortgage Assistance Professionals and
Mortgage Assistance
Professionals II. Sprecher's ruling bars the
mortgage companies
from continuing foreclosure proceedings or reporting negative data to
collection agencies on
customers who have continued to make timely payments according to their
original
agreements. The judge will decide whether to
make the temporary
injunction permanent after hearing arguments from the mortgage companies
at a Dec. 4
hearing.
name='4'>Global Power Reaches
Chapter 11 Plan Deal
Global Power Equipment Group
Inc. has reached a
deal with its noteholders and equity-holders on an amended chapter 11
plan, ending months of
contentious litigation and negotiation, the Associated Press reported
yesterday. In court
papers filed Tuesday, the supplier of power-generating equipment said
all holders of its
4.25 percent convertible senior subordinated notes due in 2011, as well
as the
equity-holders’ committee in its bankruptcy case, have agreed to
support a revised
chapter 11 plan. The new plan, whose terms are not yet finalized, will
be based on a rights
offering and private placement of up to $90 million, the proceeds of
which will go to fund
payments to creditors. Noteholders will share $86 million and up to
$750,000 as
reimbursement for legal fees spent on litigation over the notes during
the chapter 11
href='http://biz.yahoo.com/ap/071010/global_power_bankruptcy.html?.v=1'>Read
more.
Autos
name='5'>Remy Receives Court
Approval on Financing
Remy International Inc.
received bankruptcy
court permission to borrow $160 million from a unit of Barclays PLC and
begin the process of
selling $85 million in new preferred shares, the Associated Press
reported yesterday.
Bankruptcy Judge Kevin
Carey
granted interim approval on the borrowing and cleared the
way for the stock
sale by the privately held company less than 48 hours after it filed for
chapter 11
protection. Part of the $160 million interim loan is set aside to pay
off the company's
senior secured bank loans. The exit loan will pay off $125 million worth
of floating-rate
notes and provide other cash to pay off junior layers of debt.
href='http://www.chron.com/disp/story.mpl/ap/fn/5203055.html'>Read
more.
name='6'>Court Rebuffs
Objections to
size='3'>Delphi Disclosure
Statement
Bankruptcy Judge
Robert Drain overruled
numerous protests to
Delphi's disclosure statement on Tuesday, allowing the beleaguered auto
parts company to
continue inching toward its exit goal,
size='3'>Bankruptcy Law360 reported yesterday.
Two of the
objections, one brought forth by ACE and another by Bank of America,
were withdrawn in the
wake of the parties resolving their differences with the debtor. Judge
Drain gave the
remaining objectors until Oct. 19 to file their claims, with
w:st='on'>
size='3'>Delphi
size='3'>having until Oct. 24 to respond to the dissent.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=37084'>Read
more. (Registration required.)
name='7'>Dura’s
Bankruptcy Plan Leaves Bondholders Empty-Handed
Dura Automotive Systems
Inc.'s reorganization
plan may reward company managers with as much as $60 million in stock
while leaving most
bondholders empty-handed, Bloomberg News reported today.
Hedge
fund Pacificor LLC teamed up with Dura CEO Lawrence Denton and managers
in a restructuring
that values the company's equity at about $600 million; 10 percent would
be set aside for
executive incentives. The arrangement provides nothing for holders of
Dura's $561 million of
9 percent subordinated notes due in 2009. Among creditors, owners of the
$225 million in
loans guaranteed by liens on Dura assets will be repaid in full. Senior
noteholders would
collect about $230 million worth of stock and cash, or about 55 cents on
the dollar of the
$418.7 million they are owed. Dura's vendors and other general,
unsecured creditors will be
paid about 22 cents on the dollar for the $74.7 million owed.
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=atvUcQcOmEvs'>Read
more.
name='8'>Auto Workers Reach
Tentative Agreement with Chrysler
The United Automobile
Workers reached a
tentative agreement yesterday with Chrysler only six hours after union
leaders sent
Chrysler’s 45,000 workers to the picket lines, the
face='Times New
Roman' size='3'>New York Times reported today.
Chrysler officials
said their agreement included a memorandum of understanding to create a
health care trust,
similar to the one at GM Such a trust would assume Chrysler’s $18
billion liability
for medical benefits for current and retired workers and their families.
The union next
plans to go to Ford Motor, which will be under pressure to match the
terms of the other two
agreements. However, Ford is considered to be the weakest of the
three
w:st='on'>
size='3'>Detroit companies,
and it has not
finished listing all the plants it plans to shut under a restructuring
plan called The Way
href='http://www.nytimes.com/2007/10/11/business/11auto.html?_r=1&oref=slogin&ref=bu
siness&pagewanted=print'>Read more.
Passes Affordable
Housing Trust Fund Bill
While the House passed
legislation yesterday
that would create one of the biggest expansions of federal housing
programs in decades
through an affordable housing trust fund, its prospects for movement in
the Senate are
uncertain,
size='3'>CongressDaily
size='3'>reported today. The bill, by House Financial Services Chairman
Barney Frank
(D-Mass.), would allocate $800 million to $1 billion annually to states
and cities to build,
rehabilitate and preserve housing units. To deal with pay/go budget
rules, the measure would
be paid from revenues from separate measures that would overhaul
government-sponsored
enterprises (GSEs) such as Fannie Mae and Freddie Mac and the Federal
Housing Administration
mortgage insurance program. The White House has threatened to veto the
bill, saying that the
trust fund is 'largely redundant' to HUD's HOME
program.
name='10'>Global Home Files
Reorganization Plan
Global Home Products LLC
filed its
reorganization plan and disclosure statement on Tuesday, nearly a
year-and-a-half after it
originally filed for chapter 11,
size='3'>Bankruptcy
Law360 reported yesterday. Under the plan,
Global Home will
distribute $1 million to holders of general unsecured claims and $3.5
million to holders of
allowed Class 4 claims. The remaining $4 million will be used to pay
administrative claims,
priority claims and any other remaining secured claims.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=37092'>Read
more. (Registration required.)
name='11'>Tweeter Wins
Exclusivity Extension
Bankruptcy Judge
Peter J. Walsh has given
Tweeter Home
Entertainment Group Inc. an extension until next February to file and
solicit support for
its reorganization plan,
size='3'>Bankruptcy
Law360 reported yesterday. The company will
now have the exclusive
right to file its plan until Feb. 6, 2008, Besides giving the debtor
more time to file its
plan, Judge Walsh gave Tweeter until Jan. 7, 2008, to remove actions
pending as of the
company’s petition date. He also granted Tweeter’s first
omnibus motion for
order authorizing assumption and assignment of unexpired nonresidential
real property leases
and the company’s motion for an order authorizing the rejection of
certain
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=37111'>Read
more. (Registration required.)
name='12'>House Votes to Halt IRS
from Using Private Collectors
The House of
Representatives voted 232-173
yesterday to stop the IRS from using private contractors to collect tax
debts,
size='3'>CongressDaily reported today. The
authority to use
private debt collectors, which Congress granted in 2004, has long been
targeted for repeal
by Democrats. The tax collection bill passed after surviving a motion to
recommit by
Republicans, which included language to permanently repeal the estate
tax, but the GOP
motion failed 212-196. During floor debate, Rep. Charles Rangel (D-N.Y.)
invited discussion
of the estate tax issue but protested the GOP move to link it to the
private debt collection
repeal bill.
International
name='13'>British Hedge
Fund Executives Push for More Disclosure
Hedge funds should
disclose indirect
investments in companies and do a better job of informing clients and
banks about the risks
they take, a working group made up of fund executives suggested
yesterday in an attempt to
appease critics, who had called for more transparency and government
regulation, the
New York Times
size='3'>reported
yesterday. Andrew Large, a former Bank of England deputy governor who
works for a
size='3'>London hedge fund
and led the working
group, said he hoped that the initiative would create a standard that
hedge funds would obey
or risk losing clients. The group included
14 executives of
hedge funds, including GLG Partners, Cheyne Capital, Man Group, Och-Ziff
Capital Management
href='http://www.nytimes.com/2007/10/11/business/worldbusiness/11hedge.html?ref=business&
;pagewanted=print'>Read more.
href='http://www.nytimes.com/2007/10/11/business/worldbusiness/11hedge.html?ref=business&
;pagewanted=print'>