TransUnion: Auto Delinquencies to Increase in 2018

TransUnion: Auto Delinquencies to Increase in 2018

ABI Bankruptcy Brief
ABI Bankruptcy Brief
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December 14, 2017

 
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NEWS AND ANALYSIS

TransUnion: Auto Delinquencies to Increase in 2018

Auto loan delinquencies will rise in 2018, but the rate of the increase will slow down and remain below peaks seen in 2008 and 2009, TransUnion projected in an annual consumer credit forecast released yesterday, The Drive reported. Hurricanes Harvey and Irma will provide a short-term impetus to new-vehicle sales in affected markets. Longer term, TransUnion expects that a shift to used vehicle sales will offset some of the waning demand for new vehicles. Auto loans past due by 60 days or more are projected to be 1.43 percent in the final quarter of 2017, then hit 1.46 percent for the final three months of next year. The projection represents an 18.7 percent hike from the final quarter of 2013, when serious auto delinquencies were at 1.23 percent.
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Commentary: Hospital Distress to Grow if Congress Closes Door to Muni Market

The House’s tax legislation revokes nonprofit hospitals’ ability to raise money in the municipal market, where investors are willing to accept lower interest rates because the income is exempt from federal taxes, according to a Bloomberg News commentary. That’s threatening to saddle health care providers with higher borrowing costs at a time when their finances are already under pressure. "Should tax-exempt financing not be available in the future, it may really harm our ability to build affordable senior housing and assisted living facilities," said Michael Schafer, Spooner Health’s CEO. For small, rural hospitals across the country, labor, drug and technology costs are increasing faster than revenues, and patients’ unpaid debts are on the rise. David Hammer, head of municipal bond portfolio management for Pacific Investment Management Co., said the loss of the tax-exemption could raise borrowing costs by 1 to 2 percentage points at small facilities with a BBB rating or below. That "could have a meaningful impact on their balance sheets," he said. At least 26 nonprofit hospitals are already either in default or distress, meaning they’ve notified bondholders of financial troubles that make bankruptcy more likely, according to data compiled by Bloomberg. That includes falling short of financial terms set by their debt agreements and having too little cash on hand.
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Analysis: House Financial Services Committee's 14-Bill Marathon

The House Financial Services Committee passed 13 bills yesterday, including one that would stop Fannie Mae and Freddie Mac from being released by the government and another hailed as helping the underbanked in rural areas, National Mortgage News reported. Among the most significant bills approved was one by Rep. French Hill (R-Ark.) that would prevent the Treasury Department from selling its preferred stock and warrants in the government-sponsored enterprises until 2019. The bill, passed 33-27, would not prevent Congress and the Trump administration from moving forward with housing finance reform and signing legislation restructuring Fannie and Freddie. It would, however, stop the Trump administration from recapitalizing and releasing Fannie and Freddie from conservatorship, though there is no sign that it is planning to do so. A similar bill was included as part of a 2016 omnibus bill but is set to expire next year.
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Connecticut, Already Strapped, Is Coming Up Short Again

Connecticut is once again coming up short on cash, and its rainy-day fund is already strained, the Wall Street Journal reported. About halfway into the budget year, sales and income tax revenues have come in about $208 million under projections. That comes even after lawmakers enacted deep spending cuts, raised fees on motor-vehicle registrations and required teachers to contribute more to their pensions to pass a two-year budget in a bruising process that took 10 months. Shortfalls have “caused us to tap our rainy-day fund, our budget-reserve funds,” Paul Potamianos, the state’s executive budget officer, said on a conference call. “This is a problem for us because our reserves are not growing,” even though the nation is not in a recession, he said. The state’s reserves of $213 million currently comprise about 1.1 percent of expenditures. That compares with a forecasted median of 5.1 percent around the U.S. this fiscal year, according to a report released Thursday by the National Association of State Budget Officers. Connecticut Gov. Dannel Malloy (D) sent lawmakers a proposal yesterday to close its budget hole. Malloy is recommending a mix of spending cuts and tax increases including on sales and cigarettes.
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ABI Executive Director Sam Gerdano to Receive 2018 M&A Advisor Lifetime Achievement Award

ABI Executive Director Samuel J. Gerdano will receive the 2018 M&A Advisor Lifetime Achievement Award at the 12th Annual Turnaround Awards Gala on March 21, 2018, at The Colony Hotel in Palm Beach, Fla. M&A Advisor chose Gerdano for his significant contributions to the bankruptcy and restructuring industry. “We are honored to present Samuel Gerdano with the 2018 M&A Advisor Lifetime Achievement Award,” said David Fergusson, President and Co-CEO of the M&A Advisor. “In addition to the experience and vision that Mr. Gerdano brought to the American Bankruptcy Institute, Sam has tirelessly championed, for over 25 years, the advancement of our industry through his dedication to ongoing research and study, engagement with all industry stakeholders, and the representation of the Institute’s work to the courts and our governments.”
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BLOG EXCHANGE

New on ABI’s Bankruptcy Blog Exchange: FHA Borrowers Pay Steep Price to Keep Reverse Mortgage Program Afloat

The fundamental conclusion of the Federal Housing Administration’s fiscal year 2017 actuarial review is that the financial problems of the FHA Home Equity Conversion Mortgage program keep getting worse, according to a recent blog post.

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