REPORT: FORECLOSURE SALES FALL TO LOWEST LEVEL SINCE 1Q 2011
RealtyTrac reported today that short sales and foreclosure sales accounted for only 13 percent of the total homes sold in the third quarter, which was the lowest level since the first quarter of 2011, HousingWire.com reported today. Short sales and distressed sales in foreclosure or bank-owned accounted for 12.7 percent of all sales in the third quarter, down from 14.2 percent in the previous quarter and down from 14.5 percent in the third quarter of 2013, to the lowest level since RealtyTrac began tracking short sales and distressed sales combined in the first quarter of 2011, RealtyTrac said in the report. Metro areas with the highest share of combined short sales and distressed sales were Las Vegas (34.9 percent), Stockton, Calif., (31.8 percent), Modesto, Calif. (31.2 percent), Lakeland, Fla. (26.1 percent), and Jacksonville, Fla. (26.1 percent). Read more.
COMMENTARY: RISKY HOME LOANS RETURN
As Federal Housing Finance Agency Director Mel Watt introduced a plan for mortgages requiring as little as 3 percent down, the Federal Reserve and other banking regulators have approved new rules for private mortgage-backed securities that don't require the underlying loans to have any down payments at all, according to a commentary in today's Wall Street Journal. Now regulators have enacted rules that you can call the "No-Skins Game," according to the commentary, as mortgage borrowers don't have to put down any money and can have a debt-to-income ratio of up to 43 percent. The creators of mortgage-backed securities can assemble entire pools of such questionable loans, sell to investors and retain no credit risk. The regulators call them "risk-retention rules," though the commentary said that they codified that mortgage risks won't be retained. Whenever Congress gets around to reform, it should eliminate this part of the law before real damage is done, according to the commentary. Absent reform, investors could get fooled into thinking that risk is being retained by the sellers of mortgage bonds, and that "qualified mortgages" really are safe. Read more. (Subscription required.)
STUDY: MEDICAL BILL COLLECTORS WILL CONTACT 1 IN 5 AMERICANS
Americans pay three times more in medical debt to collection agencies each year than they pay for bank and credit card debt combined, according to a new study by NerdWallet Health, the Sacramento Business Journal reported today. In 2014, one in five American adults roughly 51 million will be contacted by a debt collection agency about medical bills, NerdWallet found. In 2012, $21 billion was collected. Consumers may also be overpaying; NerdWallet found hospital billing errors resulting in overcharges of up to 26 percent. Sixty-three percent of American adults say that they receive medical bills that cost more than they expected, while 57 percent say they receive medical bills that confuse them. Read more.
COMMENTARY: GOVERNMENT RAMPING UP CONTRACTS FOR AGENCIES TO PURSUE DEFAULTED STUDENT LOAN DEBT
In the coming months, the Department of Education is expected to award a contract worth $1 billion annually to private debt collection agencies that go after borrowers who have defaulted on federal student loans, according to a Bloomberg BusinessWeek commentary. Forty-two companies are in the running for the award. Brian Friel, an analyst at Bloomberg Intelligence, thinks that most, if not all, of the bidders will receive a piece of the pie. The government has made a lot more direct loans since Congress overhauled student lending programs in 2010, according to Friel, increasing the pool of bad loans that the government needs to collect on. Perhaps more important, bidders that lose out on federal contracts can appeal the decision, which then delays work on a contract. To expedite the process, agencies often award the job to all of the bidders. To be clear, according to the commentary, the government vets the companies that win contracts, at least to some degree. The government paid $898 million to collection companies that went after defaulted student loans in 2013, up 92 percent from the previous year. There were $91 billion in federal student loans in default as of Sept. 30, 2013, according to regulatory filings by Performant Financial, a Livermore, Calif.-based collection company. Read more.
WATCH NOW: ABI'S SAM GERDANO PREVIEWS THE FORTHCOMING CHAPTER 11 REFORM COMMISSION REPORT
USTP UPDATES MEDIAN FAMILY INCOME DATA FOR CASES FILED ON OR AFTER NOV. 1
The U.S. Trustee Program (USTP) has updated the Census Bureau's Median Family Income Data and will apply the updated data to cases filed on or after Nov. 1. For the latest data required for completing Form 22A and Form 22C, please click here.
NEXT FREE COMMITTEE TELECONFERENCE WILL BE NEXT WEEK ON THE BANK SECRECY ACT!
Members are encouraged to dial-in and listen to or participate in upcoming ABI Committee conference calls. While committee membership is encouraged, it is not required to join the free teleconferences. Upcoming Committee teleconferences include:
- Unsecured Trade Creditors Committee: Tuesday, Nov. 4; 3 pm ET
Topic: "Bank Secrecy Act and Anti-Money Laundering"
Speakers: Mark Gittelman of PNC Bank and Brent Weisenberg
All committee teleconferences are free to ABI members and registration is not required. Simply utilize the following dial-in information:
Call in: (712) 432-1500
Participant code: 692933
ABI MEMBERS IN SOUTHERN CALIFORNIA- DON'T MISS THE SPECIAL TMA EVENT TO BENEFIT THE WOUNDED WARRIOR PROJECT ON NOV. 12
ABI members are invited to attend TMA Southern California's special fundraiser to support the Wounded Warrior Project and SoCal veteran support groups on Nov. 12 at the Beverly Hilton. Funds raised will benefit the Wounded Warrior Project, Veterans Legal Institute and the Public Law Center. For more information or to attend, please click here.
ABI MEMBERS INVITED TO ATTEND RETIREMENT DINNER FOR BANKRUPTCY JUDGE PETER J. WALSH ON NOV. 19
ABI members are invited to a special retirement dinner on Nov. 19 honoring the Hon. Peter J. Walsh's 50 years of dedicated service to the bench and bar. The event will be held at the Chase Center on the Riverfront in Wilmington, Del., and is being hosted by the Bankruptcy Section of the Delaware State Bar Association and the Delaware Chapter of the Federal Bar Association. Questions should be directed to Karen B. Owens at 302-654-1888. To attend, please go to https://sites-pepperhamilton.vuturevx.com/107/772/uploads/judge-walsh-retirement-dinner-form.pdf
NEW CASE SUMMARY ON VOLO: DELUCA V. CUOMO (IN RE CUOMO; 9TH CIR.)
Summarized by Mark Hudson of Schian Walker PLC
In an unpublished opinion, the Ninth Circuit BAP affirmed the imposition of a sanction of the partial disgorgement of the fees of a chapter 7 debtor's counsel for failure to list a known debt on the debtor's schedules.
There are more than 1,500 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: BANKRUPTCY COURT APPROVES CASINO'S REJECTION OF CBA
A recent blog post found that when dealing with the issue of collective bargaining agreement (CBA) rejection pursuant to §1113 of the Bankruptcy Code, the bankruptcy court decision in In re Trump Entertainment Resorts, Inc. is a helpful resource.
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
The §547(c)(2) ordinary course preference defense should be repealed.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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