LOANS ABOUT TO RESET WILL MEAN HIGHER BILLS FOR MANY BORROWERS
Another bill is coming due from America's decade-old borrowing binge as payments will start to jump on a number of home-equity credit lines taken out during the boom, the Wall Street Journal reported yesterday. Economists worry that the new burden could reignite loan-payment troubles and dent consumer spending at an tenuous moment in the economic recovery. At issue are home-equity lines of credit, known as Helocs, which allow homeowners to tap their equity to fund home improvement projects, college tuitions and other expenses. Those loans typically let borrowers make interest-only payments for the first 10 years before requiring principal payments as well. That reckoning will come this year for an estimated 817,000 borrowers owing more than $23 billion in Helocs, more than double last year's level, according to estimates by Equifax, the credit-reporting firm, and the Office of the Comptroller of the Currency. An average of about $50 billion in loans will reset in each of the next three years. Read more. (Subscription required.)
DARK POOL INVESTMENT OPERATORS SHED LIGHT ON THEIR OPERATIONS
Goldman Sachs Group Inc. and Credit Suisse Group AG, two of the biggest operators of opaque trading venues known as dark pools, which execute trades away from stock exchanges, yesterday published documents explaining in detail how their venues work, the Wall Street Journal reported today. The disclosures came on the day that the Financial Industry Regulatory Authority issued for the first time data on the volume of shares traded in dark pools. Goldman Sachs has been weighing the move for more than two months. The bank has grown concerned that increases in complexity and instability in the stock market are harming investor confidence, and it hopes to address the issue by being more transparent about its own trading operations, said Brian Levine, co-head of Goldman's Global Equities Trading and Execution Services. Dark pools, private, lightly regulated trading venues where buyers and sellers can swap shares with greater anonymity than on stock exchanges, have come under criticism recently as part of a wider complaint that the U.S. stock market has become too complex. Together with so-called internalizers --firms that execute trades on behalf of retail brokerages -- they account for nearly 40 percent of all stock trading, according to Tabb Group. Read more. (Subscription required.)
LATEST ABI PODCAST FEATURES AUTHOR DISCUSSING ISSUES SURROUNDING ADVANCED FRAUDULENT TRANSFERS
ABI's latest podcast features Resident Scholar Prof. Charles Tabb talking with Edward S. Weisfelner of Brown Rudnick LLP (New York). Weisfelner, the author of ABI's newest title, Advanced Fraudulent Transfers: A Litigation Guide, discusses the book and and the growth in fraudulent conveyance litigation following failed leveraged transactions. Click here to listen.
To purchase Advanced Fraudulent Transfers: A Litigation Guide, written by Mr. Weisfelner, please click here.
MISS LAST FRIDAY'S STUDENT DEBT SYMPOSIUM? PURCHASE THE SESSIONS ON ABI'S ELEARNING WEBSITE!
If you were not able to attend ABI's Student Debt Symposium held last Friday at Georgetown University Law Center, all sessions from the program are now available on the eLearning site! This unique day-long symposium, funded in part by a grant from the National Conference of Bankruptcy Judges Endowment for Education, featured academics, consumer bankruptcy practitioners, bankruptcy judges, consumers and policy-makers addressing the causes, consequences and possible reform of the student debt problem. Sessions available for purchase include:
- What We Have: An Overview of the Student Loan Process
- What We Have Is Broken: Problems with the Current System and System-Wide Fixes
- Economic Effect of the Increase in Student Borrowing and Debt
- Default and Distress Issues
- How Hard Is the "Hard" in "Hardship"? The Current State of § 523(a)(8)
- The Chapter 13 Option
- Avoiding Bankruptcy: What Options Exist (and Are Accessible)?
- The Easy Fix: Is Repealing § 523(a)(8) Really the Answer?
NEW CASE SUMMARY ON VOLO: DEGIACOMO V. TRAVERSE (IN RE TRAVERSE; 1ST CIR.)
Summarized by Guy Moss of Riemer & Braunstein LLP
Reversing the lower courts, the First Circuit concluded that when an undefaulted mortgage lien is avoided and preserved for the benefit of the estate under § 551, and when the value of the property is less than the total of all mortgage liens and the debtor's homestead exemption, the trustee may not sell the property pursuant to § 363, but rather is limited to either (1) selling the avoided mortgage or (2) simply stepping into the shoes of the mortgagee and awaiting a voluntary sale by the debtor or a default that would allow foreclosure.
There are more than 1,300 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 GRAND BARGAIN? DETROIT DEFENDS RESTRUCTURING PLAN
A recent post examines Detroit's defense of its proposed restructuring plan, which is slated to be heard when the trial on the city's restructuring plan begins on July 24.
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
A special Bankruptcy Code chapter 14 should be created for "TBTF" (too-big-to-fail) financial institutions.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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