A report released today by the Office of the Comptroller of the Currency found that national banks in the U.S. are easing underwriting standards for commercial and retail loans as they seek growth in a highly competitive environment, the Wall Street Journal reported today. The OCC said that credit card loans, large corporate loans, leveraged loans to borrowers with already-high debt levels and international loans were among the categories in which banks had loosened requirements on collateral or taken other steps to make loans more attractive. The survey covered 87 percent of loans in the federal banking system and included data from the 18 months leading up to June 30, 2013. The OCC noted one exception to the trend: Underwriting standards for home-equity loans have tightened. Read more. (Subscription required.)
HOME FORECLOSURES FALL 24 PERCENT IN 2013
Real estate data firm CoreLogic Inc. reported yesterday that the number of completed home foreclosures in the U.S. in 2013 fell 24 percent from the year before, with the number of homes in some stage of the foreclosure process down 31 percent, the Washington Business Journal reported today. For all of last year, 620,111 mortgage foreclosures were completed, compared with 820,498 in 2012. Florida, Michigan, California, Texas and Georgia accounted for almost half of all completed foreclosures nationally last year. Read more.
RENTAL INDUSTRY SECURITIZATIONS BOOMING ON WALL STREET
Investment bankers and lawyers are now lining up to finance investors, from big private-equity firms to plumbers and dentists moonlighting as landlords, who are buying up foreclosed houses and renting them out, the New York Times DealBook blog reported today. The latest company to test this emerging frontier in securitization is American Homes 4 Rent. The company talked to prospective investors at a conference in Las Vegas last week about selling securities tied to $500 million of debt. American Homes 4 Rent, which went public in August, has tapped JPMorgan Chase, Goldman Sachs and Wells Fargo as its bankers for a debt deal that is expected to be sold by the end of the first quarter. While this securitization market is still in its infancy, a recent Wall Street estimate put potential financing opportunities for the single-family rental industry as high as $1.5 trillion. Already some members of Congress and economists are worried about another credit bubble. In just the last two years, large investors have bought as many as 200,000 single-family houses and are now renting them out, according to the K.B.W. report. Private-equity giant Blackstone Group sold the first single-family rental securitization of its kind last fall, a $479 million bond, attracting six times as many investors as the private equity firm could accept. Read more.
SUBPRIME MORTGAGES MAKE COMEBACK AS "NONPRIME"
Today's purveyors of subprime home mortgage loans are now terming the loans as "nonprime" and requiring as much as 30 percent down to safeguard their investments, Bloomberg News reported yesterday. They see a big opportunity for growth as tougher federal lending standards have shut out millions of Americans with poor credit from the mortgage market. The current level of subprime lending is a trickle compared with the flood that helped spur the housing boom. About $3 billion of subprime mortgages were made in the first nine months of 2013, matching the year-earlier period, according to Inside Mortgage Finance, a trade journal. In 2005, subprime originations reached $625 billion. Investors are taking a pass on subprime for now. Lenders have to either hold onto their loans or sell them to private equity firms until they establish a strong enough track record to offer mortgage-backed securities to investors. That leaves the Federal Housing Administration and Ginnie Mae, which packages FHA subprime loans into bonds, as the main sources of help to the riskiest borrowers. Read more.
PUBLIC COMMENT PERIOD ENDING SOON FOR PROPOSED AMENDMENTS TO THE FEDERAL RULES OF BANKRUPTCY PROCEDURE
The Judicial Conference Advisory Committee on Bankruptcy Rules has proposed amendments to the Federal Rules of Bankruptcy Procedure and Official Forms, and requested that the proposals be circulated to the bench, bar, and public for comment. On August 15, 2013, the public comment period opened for the proposed amendments to Bankruptcy Rules 2002, 3002, 3007, 3012, 3015, 4003, 5005, 5009, 7001, 9006, and 9009, and Official Forms 17A, 17B, 17C, 22A-1, 22A-1Supp, 22A-2, 22B, 22C-1, 22C-2, 101, 101A, 101B, 104, 105, 106Sum, 106A/B, 106C, 106D, 106E/F, 106G, 106H, 106Dec, 107, 112, 113, 119, 121, 318, 423, and 427. The public comment period closes on February 15, 2014. For more information, please click here.
To access the online comment site for the proposed amendments, please click here.
PURCHASE EITHER THE CONSUMER OR BUSINESS EDITION OF THE BEST OF ABI 2013 AND RECEIVE A FREE ADDITIONAL TITLE!
To make room for new books in 2014, ABI is having a special Bookstore clearance sale. Now, when you buy either Best of ABI 2013: The Year in Business Bankruptcy or The Year in Consumer Bankruptcy, you can choose a free book from a select list of ABI publications. You'll be able to make your selection when you click "Buy Now" on either edition of the Best of ABI 2013. To purchase the Best of ABI 2013: The Year in Business Bankruptcy, please click here.
Be sure to select your free book before adding your books to the purchase cart! To purchase the Best of ABI 2013: The Year in Consumer Bankruptcy, please click here.
LOOKING FOR A REPLAY OF THE "BACK TO BASICS" WEBINARS? CHECK OUT ABI'S CLE SITE!
The final installment of the ABI's "Back to Basics" live webinar series, hosted by the Young and New Members Committee, was held Tuesday, and you will soon have the opportunity to access the programs at your convenience! The three webinars in the series, an examination of financial statements and operating reports, using financial documents as evidence and issues surrounding bankruptcy and hedge funds, will be posted to ABI's e-Learning website. Let a trusted CLE provider help get your associates up to speed.
ABI'S SIXTH ANNUAL LAW STUDENT WRITING COMPETITION DEADLINE APPROACHING
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.
DETROIT EMERGENCY MANAGER KEVYN ORR TO KEYNOTE ABI'S 32ND ANNUAL SPRING MEETING ON APRIL 25
Kevyn Orr, emergency manager to the city of Detroit, will provide the keynote at the Friday Luncheon at ABI's 32nd Annual Spring Meeting at the JW Marriott in downtown Washington, D.C. The conference, taking place April 24-27, 2014, features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various "tracks," including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. The Annual Spring Meeting offers 18.25/22 hours of CLE/CPE credit, along with ethics credit totaling 3.25/4 hours. In addition, committee sessions will drill down on topics covered in the larger sessions to provide you with the most practical and varied CLE/CPE experience ever. Also featured will be a special half-day optional event sponsored by ABI and the FCBA titled "The Intersection of the FCC and Bankruptcy Law."
Sessions at the 2014 Annual Spring Meeting include:
- 18th Annual Great Debates
- Where the Work Is (and Isn't)
- The Ever-Changing Role of Committees
- Large Complex Trusts: A General Motors Case Study
- Municipal Bankruptcies
- Use of Governmental Assistance Programs in Chapter 13
- The Financial Professional's Role in Out-of-Court Restructurings and Dissolutions
- Civility in the Restructuring Profession
- Union Contracts
- Student Loan Update
- Social Media: What You Don't Know Can Hurt You
- The § 363 Sale Process from a Transactional Perspective
The conference kicks off with an Opening Reception at the Smithsonian's National Museum of the American Indian, offering a truly D.C. experience. Optional events include a golf tournament at Westfields Golf Club, a Washington Nationals vs. San Diego Padres baseball game and an evening at the Kennedy Center with the National Symphony Orchestra.
NEW CASE SUMMARY ON VOLO: SPITZAUER V. EXOTERM HOLDING D.D., ET AL. (IN RE SPITZAUER; 9TH CIR.)
Summarized by Lars Fuller of Baker & Hostetler LLP
The Ninth Circuit affirmed the BAP's decision affirming the bankruptcy court's order denying the appellant's second motion to extend time to file a notice of appeal. The Ninth Circuit ruled that the bankruptcy court correctly denied the appellant's extension request because, even assuming a showing of excusable neglect, the appellant failed to file his request within the 21-day period required by FRBP 8002(c)(2).
There are nearly 1,200 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: HOW THE RIGHT TO DEMAND ADEQUATE ASSURANCE (UNDER STATE LAW) ATTEMPTS TO PROTECT CONTRACT COUNTERPARTIES
The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post examines the state law doctrine of adequate assurance, which sometimes gives contract counterparties who have reasonable grounds for insecurity the right to demand adequate assurance of future performance. The Bankruptcy Code imported this doctrine, at least to an extent, in §§365(b) and (f), which govern circumstances when adequate assurance must be provided upon assumption, or assumption and assignment of a contract.
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 Bankruptcy Code permits a debtor to artificially impair a class for cramdown purposes.
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