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RealtyTrac: Foreclosures Rise in 3Q as Legal Logjam Loosens

ABI Bankruptcy Brief

 

ABI Bankruptcy Brief
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October 15, 2015

 
ABI Bankruptcy Brief
 

NEWS AND ANALYSIS

RealtyTrac: Foreclosures Rise in 3Q as Legal Logjam Loosens

RealtyTrac reported today that the number of properties in foreclosure nationwide rose in the third quarter as the logjam in some judicial states has loosened, NationalMortgageNews.com reported. The total number of U.S. properties with foreclosure filings attached to them increased 3 percent in the third quarter to 327,258 compared to a year ago, RealtyTrac said. A total of 133,811 properties began the foreclosure process in the third quarter, a decrease of 14 percent on a yearly basis. That's the lowest level of new foreclosures since the third quarter of 2005. The number of properties repossessed by the lender and placed into REO status increased 66 percent to 123,040.

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Detroit Looks to Move Forward after Record Bankruptcy

Ten months after emerging from a record $18 billion municipal bankruptcy, Detroit is functioning in ways unseen for months and even years -- street lights are on, parks are getting mowed, municipal debt is being sold on the public market and the police are training civilians to manage traffic at clogged intersections, Bloomberg News reported yesterday. Yet the vast expanse of residential streets, where four out of 10 live in poverty, map the long-term challenge that remains. Surrounding neighborhoods represent 95 percent of Detroit's land mass, roughly the size of Boston and Baltimore combined, and await revival amid 70,000 vacant buildings. Despite indicators of increased housing sales, the city continues to lose population, dropping to 680,000 last year.

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Analysis: The Missing Boom in Small-Business Sales

Despite predictions that a flood of small businesses would be coming up for sale as owners of a certain generation ready themselves for retirement, many are holding on longer than expected, the Wall Street Journal reported today. According to a U.S. Census Bureau count of owners of incorporated firms, people age 55 and older accounted for 38 percent of business owners in 2013, the most recent data available, up from 29 percent in 2005. Sales of small firms are on pace to drop 3 percent this year, after increasing in 2014 to their highest levels since at least 2007, according to BizBuySell.com, an online marketplace for buying and selling small companies. Brokers reported 1,814 businesses changing hands in the third quarter, the company says, down 5 percent from the previous quarter and 9 percent from the same period a year earlier. (Subscription required.)

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Wall Street Sets Aside More Cash to Cover Weaker Oil Loans

Wall Street lenders that bankrolled the debt-fueled U.S. oil boom are putting aside more cash to cover potential energy losses as "lower for longer" takes its toll, Bloomberg News reported today. After rebounding to $61 a barrel in June, crude prices tumbled 24 percent in the third quarter. Citigroup Inc. reported today that it increased loan loss reserves for energy by $140 million in the third quarter. JPMorgan Chase & Co. said that it has set aside an additional $160 million. Bank of America Corp.'s at-risk loans increased 15 percent from a year ago due to the deteriorating finances of some of its oil and gas borrowers. Producers have sold $61.5 billion in equity and debt since January, half of which went to repay loans or restructure debt, at least in part, according to data compiled by Bloomberg.

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October ABI Journal Article Proposes Redefining Student Loans to Assist Struggling Debtors Seeking Ch. 7 Relief

An article in the October edition of the ABI Journal proposes that adding a definition within the Bankruptcy Code that classifies student loans as business expenses could help some struggling debtors potentially qualify for chapter 7 relief. Debt that has more than one purpose or is the result of commingling of personal and business expenses can be characterized as a business expense and subject to discharge, according to Tami Wells Thomas of The Wells Thomas Law Firm LLC (Conyers, Ga.) in her article "Student Loan Debts as Non-Consumer Debts -- or Not."

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ICYMI: Watch the "BAPCPA at 10": Media Webinars for Business and Consumer Trends!

Ten years after its implementation, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) continues to reshape the landscape for both consumer and business bankruptcies. ABI held two webinars to assess the effects of BAPCPA on financially distressed consumers and businesses. Watch both:

- Consumer Trends

- Business Trends

BLOG EXCHANGE

New on ABI's Bankruptcy Blog Exchange: Re-examining Glass-Steagall

With one of the topics at the Democratic debates being the Glass-Steagall Act and the financial crisis, a recent blog post examines the political impetus behind Glass-Steagall.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

 
 
 
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