CFPB PROVIDES GUIDANCE ON MORTGAGE SERVICING RULES
The Consumer Financial Protection Bureau (CFPB) today released a bulletin and interim final rule to provide greater clarity to the market concerning mortgage servicing rules that take effect in January 2014, according to a CFPB release. The clarifications address communications with consumers who have filed for bankruptcy or invoked certain protections under the Fair Debt Collection Practices Act. In January 2013, the CFPB issued rules to establish stronger protections for struggling homeowners, including those facing foreclosure. Several observers suggested that the rule may conflict with the automatic stay and other debtor protections. To read the CFPB's bulletin released today, please click here.
To read the interim final rule, please click here.
In dentists' and doctors' offices, hearing aid centers and pain clinics, American health care is forging a lucrative alliance with American finance, according to a New York Times report yesterday. A growing number of health care professionals are urging patients to pay for treatment not covered by their insurance plans with credit cards and lines of credit that can be arranged quickly in the provider's office. The cards and loans, which were first marketed about a decade ago for cosmetic surgery and other elective procedures, are now proliferating among older Americans, who often face large out-of-pocket expenses for basic care that is not covered by Medicare or private insurance. The American Medical Association and the American Dental Association have no formal policy on the cards, but some practitioners refuse to use them, saying that they threaten to exploit the traditional relationship between provider and patient. Doctors, dentists and others have a financial incentive to recommend the financing because it encourages patients to opt for procedures and products that they might otherwise forgo because they are not covered by insurance. It also ensures that providers are paid upfront -- a fact that financial services companies promote in marketing material to providers. Many of these cards initially charge no interest for a promotional period, typically six to 18 months, an attractive feature for people worried about whether they can afford care. But if the debt is not paid in full when that time is up, costly rates -- usually 25 to 30 percent -- kick in. If payments are late, patients face additional fees and, in most cases, their rates increase automatically. The higher rates are often retroactive, meaning that they are applied to patients' original balances, rather than to the amount they still owe. Read more.
The government shutdown and debt-ceiling fight are clouding the outlook for the global economy and markets, but they are bringing clarity to one area: The Federal Reserve is now likely to keep its foot on the monetary gas pedal even longer to offset damage from the standoff, the Wall Street Journal reported yesterday. Two weeks into the shutdown, it is becoming clearer that economic growth will be at least a little slower. Businesses and consumers are less confident about the economy's near-term course than they were before the shutdown started. And the most closely watched official gauges of economic activity -- the government reports suspended by the shutdown -- will be unlikely to provide reliable readings for months. The latest events in Washington, D.C., make Fed officials appear judicious in their decision last month to keep their $85 billion-a-month bond-buying program unchanged despite widespread market expectations of a pullback. Read more. (Subscription required.)
COMMERCIAL-PROPERTY LENDING BEGINS TO RAMP UP
Many U.S. banks are starting to see new growth from the old business of commercial real estate loans, the Wall Street Journal reported today. As of June 30, U.S. banks had $991.2 billion in total commercial real estate loans, up 3.3 percent from a year earlier, according to research firm SNL Financial. JPMorgan Chase & Co. on Friday reported that outstanding commercial-real-estate loans rose to $61.5 billion in the third quarter, a 12 percent increase from a year earlier. Dolben Co., a developer of apartment complexes in the New England and mid-Atlantic regions, has seen more banks willing to bid on loans for projects in the past two years than immediately following the recession, said Deane Dolben, president of the Woburn, Mass.-based company. The growth and optimism are a turnaround from the slump caused when banks were hammered during the financial crisis as construction loans made during the real-estate boom began to sour. Total commercial real estate loans outstanding by U.S. banks declined to $950 billion in 2011, a 25 percent plunge from 2008, according to SNL Financial. Read more. (Subscription required.)
ANALYSIS: BUYOUT FIRMS COMBING U.S. FOR FUNDS TO INVEST
Across the country, nearly 2,000 private-equity firms are making pitches to state retirement systems, corporate pension funds and wealthy investors in the hope of raising nearly three-quarters of a trillion dollars for their next, new funds -- more than what was raised over the last two years combined, the New York Times DealBook blog reported yesterday. Huge buyout funds raised large sums during the golden age of private equity that went on a frenzied acquisition spree between 2005 and 2007. Using vast amounts of borrowed money, they bought big and small companies, often at sky-high prices. That sequence turned out to be a recipe for disaster when the financial crisis erupted in 2008. Buyout funds that started to invest in 2006, for instance, have been among the industry's worst performing. The median internal rate of return after fees is 8.2 percent, according to the research firm Preqin, the lowest since it started tracking buyout performance in 1980 and about half the average for the previous five years. Read more.
ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS
Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.
RISKY TIMES FOR SECURED LENDERS AND SERVICERS TO BE FOCUS OF FIRST ABI WORKSHOP PROGRAM- ATTEND IN PERSON OR VIA LIVE WEBSTREAM!
You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held on Nov. 6 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:
- Living with the New CFPB Mortgage Servicing Rules
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Business Lending: Navigating What Lies Ahead
- Business Lending: Recent Legal Developments
For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.
EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM ON NOV. 15
Experts will tackle the hot topic of student lending issues in bankruptcy on the abiWorkshops series' new program, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" The program will be held on Nov. 15 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 15 program include:
- Student Lending Today: Who Borrows, How Much, Delinquency & Default Trends
- Repayment Options: Income Based Repayment and New Lender/Servicer Programs
- Litigation under Sect. 523(a)(8): What Proofs Are Needed? Evidence Demonstration
For more information or to register for the "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" abiWorkshop on Nov. 15, please click here.
ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER
The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup — sponsored by Great American Group — is based on your top three scores from the seven ABI events. 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! A 22-handicapper won the tour event at July’s Southeast Bankruptcy Workshop. There's no charge to register or participate in the Tour.
ABI IN-DEPTH
NEW CASE SUMMARY ON VOLO: UTNEHMER V. CRULL (IN RE UTNEHMER; 9TH CIR.)
Summarized by Hilda Montes de Oca of the U.S. Bankruptcy Court for the Central District of California
Applying California partnership law, the Ninth Circuit Bankruptcy Appellate Panel reversed the bankruptcy court because it erred when it decided that a partnership existed between the debtor defendant and plaintiff creditor based upon the terms of a loan agreement. As there was no partnership, the debtor owed no fiduciary obligations to the creditor. The BAP further found that the bankruptcy court used the wrong mens rea standard for defalcation. As a result, the bankruptcy court erred in determining that debtor's debt to creditor was excepted from discharge as a defalcation by a fiduciary pursuant to § 523(a)(4).
There are more than 1,000 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: FURTHER EXAMINATION OF MEDICAL CREDIT CARDS
The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post further examines the benefits and pitfalls of the growing trend of medical credit cards.
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
Does the bankruptcy court's Section 105 power enable it to surcharge the debtor's exempt property?
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 43 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.
