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RISING MORTGAGE RATES ELICIT FEARS THEY COULD HURT HOUSING RECOVERY



Mortgage rates have spiked over the past few weeks, rising at the fastest pace since 2010, sparking fears that the housing market could weaken and undermine the country’s economic recovery, the Washington Post reported yesterday. Rates are now hovering near 4 percent, still historically low, but nearly two-thirds of a percentage point higher than last month. They have been driven up by the Federal Reserve’s anticipated move to begin scaling back its generous bond-buying program. “The biggest threat to the recovery is that rates rise too fast,” said Mark Zandi, chief economist at Moody’s Analytics. Already there are signs that higher rates are becoming a drag on the housing market. Refinancing applications fell 11 percent over the past two weeks, according to the Mortgage Bankers Association. They are down 36 percent from the beginning of May. Read more.

REPORT: STUDENT DEBT RELIEF INDUSTRY PROFITING FROM DESPERATION



A report released yesterday by the Boston-based National Consumer Law Center showed that the growing student-loan debt-relief industry is profiting from consumers’ confusion and desperation, with some companies charging as much as $1,600 to sign borrowers up for repayment plans, Bloomberg News reported yesterday. Such companies are proliferating because borrowers are buckling under the weight of student loans, which now total $1 trillion, exceeding all other consumer debt aside from mortgages. Former students are also struggling to navigate the government’s often complicated assistance programs. Student loan debt-relief companies say that they are comparable to organizations that help taxpayers file their returns – something customers could also do for free. The U.S. Consumer Financial Protection Bureau has heard from borrowers who say that companies are marketing special plans that can save thousands of dollars in loan payments, said Rohit Chopra, the agency’s student loan ombudsman. “It is not a special deal,” Chopra said. “It’s often a program they are entitled to by law.” Read more.

COMMENTARY: BILL TAKES THE WRONG APPROACH ON ASBESTOS INJURIES



Republicans pushed a bill through the House Judiciary Committee last month that would make it harder for plaintiffs injured by asbestos to get fair compensation, according to an editorial in yesterday's New York Times. The bill is supposedly designed to root out fraud and abuse, but there is no persuasive evidence of any significant fraud or abuse, according to the editorial. Before plunging ahead with this attempt to protect asbestos companies from lawsuits, the editorial urges Congress to commission an objective study of whether there is even a problem that needs fixing. Millions of workers have been injured by asbestos over the years, and thousands of suits have been filed against asbestos companies, which often were aware of the dangers but concealed the risks from workers and the public. Dozens of companies declared bankruptcy and established trusts, financed with company money, to pay present and future claims against them. The trusts typically pay only a small percentage of the value of a claim. Plaintiffs are also free to sue companies that have not gone bankrupt. The bill, known as the Furthering Asbestos Claim Transparency Act (FACT) of 2013, would allow asbestos companies to demand information from the trusts for virtually any reason, according to the editorial, forcing the trusts to devote limited resources to responding to fishing expeditions that will slow the process of paying claims. Read the full editorial.

LATEST ABI PODCAST EXAMINES SUPREME COURT'S DECISION ON THE MEANING OF “DEFALCATION”



ABI's latest podcast features ABI Resident Scholar Scott Pryor speaking with Prof. Keith Sharfman of St. John's University School of Law and attorney Tom Byrne of Sutherland Asbill & Brennan LLP (Atlanta) on the issues surrounding the Supreme Court's unanimous decision in Bullock v. BankChampaign, N.A. In its decision on May 13, the Court held that a defalcation by a trustee requires a finding of gross negligence or some knowledge that what he or she is doing is improper. Byrne was the counsel of record for Randy Bullock, and Scharfman joined fellow professors on an amici curiae brief in support of BankChampaign. Click here to listen to the podcast.

NEW ABI LIVE WEBINAR ON JULY 15 WILL FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES



Utilizing a case study, ABI's panel of experts will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place on July 15 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE NORTHEAST BANKRUPTCY CONFERENCE ON JULY 12



The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour.

ABI IN-DEPTH

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS



In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

NEW CASE SUMMARY ON VOLO: IN RE DESOUZA (1ST CIR.)



Summarized by David Baker of Law Office of David G. Baker

The First Circuit BAP reversed and remanded the lower court's ruling, holding that post-petiiton divorce court orders for alimony did not violate the automatic stay in a chapter 13 case, but when the debtor was found in contempt and incarcerated for failure to pay alimony, the contempt and incarceration were stay violations because they impacted "property of the estate" under §§541 and 1306.

There are more than 900 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: DID CORKER-WARNER JUMP THE GUN ON THE "SKIN IN THE GAME" TARGET?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. The Corker-Warner bill would require private investors to take 10 percent of losses before federal mortgage guarantees kick in, but a new blog post says that more research is needed to determine whether that is enough protection for taxpayers.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

Law firms should provide support for law student-staffed bankruptcy clinics for consumer debtors.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- abiLIVE Webinar

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

     July 18-21, 2013 | Amelia Island, Fla.

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

    August 22-24, 2013 | Incline Village, Nev.

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

November

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

REGULATORS QUESTION BANKS ON BUSINESS LENDING RISKS



U.S. regulators are grilling banks over lending standards and warning them about mounting risks in business loans, the Wall Street Journal reported today. Lending to companies has been a bright spot for banks searching for revenue amid slow economic growth and historically low interest rates. But regulators worry that banks have sweetened loan terms too much, which could put them in jeopardy if corporate borrowers can't repay. Bank examiners are pulling out more loans for inspection, questioning loan officers more thoroughly about credit standards and studying other underwriting functions more closely than they have in years, according to bankers, consultants and regulators. In private meetings with bankers in recent months, regulators from the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve Board have all focused heavily on commercial lending. Looser lending standards are part of a wave of risk-taking that is sweeping through the capital markets, from stock investors loading up on margin debt and piling into high-yield and investment-grade corporate bonds, to private-equity firms ramping up leveraged buyouts. Read more. (Subscription required.)

HOUSE PASSES BILL TO LIMIT CFTC'S CROSS-BORDER SWAPS AUTHORITY



House lawmakers passed legislation yesterday that would curb the U.S. Commodity Futures Trading Commission’s authority to oversee the $633 trillion global swaps market, Bloomberg News reported today. The bipartisan bill’s approval came as a majority of CFTC commissioners have signaled they want to delay final action on how new derivatives rules apply to foreign banks and the overseas affiliates of U.S. banks and hedge funds. Chairman Gary Gensler insists the agency should take its final vote on the guidance by July 12, when the current deadline expires. While the bill is not expected to be introduced in the Senate, the House vote could increase pressure on Gensler to agree to a delay. The CFTC will decide how to press forward after the Securities and Exchange Commission last month outlined a different approach to regulating swaps that it oversees, which hews closer to industry viewpoints. The House bill would exempt foreign banks from CFTC rules if their home countries have broadly similar regulations and would force the CFTC and SEC to reconcile their approaches. Read more.

FORECLOSURES JUMP AS BANKS BET ON RISING U.S. HOME PRICES



Home repossessions in the U.S. jumped 11 percent in May after declining for the previous five months as rising prices and limited inventory for sale across the country spurred banks to complete foreclosures, Bloomberg News reported today. Lenders took back 38,946 homes, up from 34,997 in April, according to Irvine, Calif.-based data firm RealtyTrac, which tracks notices of default, auction and seizures. Thirty-three states had increases in the number of homes repossessed, RealtyTrac said in a report today. The biggest annual jumps in states with more than 1,000 home repossessions occurred in North Carolina, up 60 percent from the previous month, followed by gains of 44 percent in both Wisconsin and Illinois, 23 percent in Colorado and 19 percent in Michigan, according to RealtyTrac. Read more.

COMMENTARY: GOVERNMENT'S GSE OVERHAUL EFFORTS REFLECT FEW LESSONS OF HOUSING CRISIS



Nearly five years after the government took over mortgage giants Fannie Mae and Freddie Mac, Congress is gingerly approaching the process of how Americans buy homes, according to a commentary in the New York Times DealBook blog yesterday. Sens. Bob Corker (R-Tenn.) and Mark R. Warner (D-Va.) have been working on a bill that would create a government insurance operation, similar to the Federal Deposit Insurance Corporation, that would insure mortgage-backed securities. Private investors would have to shoulder the first losses, probably about 10 percent. Taxpayers would not have to bail out those investors should things go south. If the Corker-Warner proposal were to go through, the private companies that have pole position would be the private mortgage insurers. However, private mortgage insurers were quietly a major part of the problem after the housing bubble burst, according to the commentary. They were woefully undercapitalized and have been operating almost as zombie institutions. Read the full commentary.

REPORT: STATE BUDGETS ARE ON THE MEND



A new report released today showed that states are climbing out of the deep fiscal hole they fell into during the economic downturn, but the pace of the recovery is expected to slow as federal budget cuts kick in and a valuable tax windfall disappears, the Washington Post reported today. The Fiscal Survey of States found that the fiscal distress that gripped states in the years after the recession has largely eased. The report said that 30 states are on course to enjoy surpluses and that 10 others are right on target with revenue. Meanwhile, 42 governors proposed budgets that increased spending for next year, and many states can begin restoring money to key programs that they were forced to cut in recent years. But the report warned that the fiscal future is uncertain. Analysts are still waiting for states to feel the full impact of the across-the-board federal budget cuts that went into effect earlier this year. Also, although improving, unemployment remains high, creating a drag on revenue while elevating social service spending. Read more.

NEW ABI LIVE WEBINAR ON JULY 15 WILL FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES



Utilizing a case study, ABI's panel of experts on July 15 will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE NORTHEAST BANKRUPTCY CONFERENCE ON JULY 12



The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour, and women are most welcome.

ABI IN-DEPTH

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS



In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

NEW CASE SUMMARY ON VOLO: PAZDZIERZ V. FIRST AMERICAN TITLE INSURANCE CO. (IN RE PAZDZIERZ; 6TH CIR.)



Summarized by Geoffrey Peters of Weltman, Weinberg & Reis Co. LPA

Affirming the U.S. District Court for the Eastern District of Michigan, the Sixth Circuit Court of Appeals held that claims of fraud that are grounded in tangible property rights such as judgments or promissory notes are assignable under Michigan law. The Sixth Circuit distinguished naked claims of fraud, not based upon a tangible property right, which are not assignable under Michigan law. The Sixth Circuit also held that the assignee of a tangible property right can seek nondischargeability under 11 U.S.C. section 523(a)(2)(B).

There are more than 900 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: A "BOUNDLESS INFORMANT" FOR FINANCIAL SYSTEM COULD END TBTF

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new blog post speculates that regulators could use the power of data mining and pattern-matching algorithms to seek out triggers of contagion across an interconnected financial system.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

Law firms should provide support for law student-staffed bankruptcy clinics for consumer debtors.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

June

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- abiLIVE Webinar

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

     July 18-21, 2013 | Amelia Island, Fla.

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

    August 22-24, 2013 | Incline Village, Nev.

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

November

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York