Foreclosure filings in the U.S. fell in June to levels not seen since before the housing bubble burst eight years ago, causing 5.5 million people to lose their homes, Bloomberg News reported today. Properties with a default, auction or repossession notice totaled 107,194 last month, down 16 percent from a year earlier and the lowest since July 2006, Irvine, Calif.-based RealtyTrac Inc. said today in a report. Prices peaked a month later and then collapsed amid mortgage defaults that led to a more than 30 percent drop nationally and as much as 60 percent in the hardest-hit communities. RealtyTrac forecast that foreclosures will be initiated on a record-low 630,000 homes this year, down from 747,700 last year and 2.1 million in 2009. The 70 percent decrease shows how constrained lending has become since banks issued subprime loans to borrowers with impaired credit during the bubble, said Paul Willen, a senior economist at the Federal Reserve Bank of Boston. Read more.
ANALYSIS: BUYOUT SHOPS MUST DIG DEEPER INTO WALLETS FOR PURCHASES
Private-equity firms purchased 41 companies in the second quarter in leveraged buyouts, the busiest quarter since 2007, according to S&P Capital IQ LCD, and they fetched some of the loftiest valuations paid since that period, the Wall Street Journal reported today. The rising value of takeover targets has been fueled in large part by the soaring stock market, with the S&P 500 reaching record levels. That has mainly been a boon for private-equity firms, which have been able to sell many of their existing holdings for big profits. But the firms' challenge in finding bargains to buy is concerning some analysts and investors, who worry that high prices could dent profits. "Lofty valuations could limit the opportunity to generate good returns," said Kenneth Worthington, an analyst with J.P. Morgan Chase & Co. By dollar volume, there was $47.6 billion in LBOs in the second quarter, the third-highest quarterly total since 2007, according to S&P. Most of these deals were for closely held companies, businesses cast off by big corporations and the holdings of rival private-equity firms. Prices for these assets have risen alongside those of public companies. Read more. (Subscription required.)
SENATE JUDICIARY ADVANCES JUDGE PEPPER'S NOMINATION TO U.S. DISTRICT COURT
The Senate Judiciary Committee voted today in favor of Bankruptcy Judge Pamela Pepper becoming U.S. District Judge for the Eastern District of Wisconsin. At its executive business meeting today, the committee recorded a voice vote in favor of Judge Pepper's nomination, which will now be brought before the U.S. Senate for confirmation. Judge Pepper serves on the ABI Board of Directors.
CFPB LOOKS TO GOING PUBLIC WITH BANKING COMPLAINTS
Minorities have been disappearing from the ranks of homebuyers who seek and receive conventional loans backed by Fannie Mae and Freddie Mac, a trend that poses risks for them and for the U.S. economy, Bloomberg News reported yesterday. With minorities growing as a share of the population, their homebuying patterns will have an increasing impact on housing sales. African Americans are about 13 percent of the U.S. population but represented about 5 percent of conventional mortgage borrowers in 2001, before the housing bubble burst, according to data collected by federal regulators. By 2012, they were only 2 percent. Over the same period, Hispanics dropped from almost 8 percent of such borrowers to 4.5 percent, even as their share of the population grew to 17 percent. The disparities are set to grow. By 2025, minorities could make up almost half of the population between the ages of 24 and 34, when most first-time buyers enter the market, according to a June report by Harvard University's Joint Center on Housing Studies. Read more.
NEW CASE SUMMARY ON VOLO: HOSKINS V. CITIGROUP (IN RE VIOLA; 9TH CIR.)
Summarized by Clifford Stevens of Neumiller & Beardslee
The Ninth Circuit ruled that a "transferee" under 11 U.S.C. § 550(a)(1) is one who has legal title to the funds and the ability to use them as the recipient sees fit. This is the "dominion test." The Ninth Circuit ruled that allegations of open and exclusive control through fraudulent misappropriation of funds is insufficient to satisfy the dominion test.
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: SUPREME COURT TO TACKLE QUESTIONS LEFT UNANSWERED BY STERN AND EXECUTIVE BENEFITS
A recent blog post takes a closer look at the issues in Wellness Int'l Network v. Sharif, for which the Supreme Court will consider whether bankruptcy courts can enter final judgments in Stern claims against a debtor where the debtor has consented to the exercise of such judicial power by voluntarily filing for bankruptcy relief.
The Wellness case will be discussed in a forthcoming ABI podcast.
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.
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