Bankruptcy Law May Be Modified

Octavion — Thu, 26 Feb 2009 22:20:00 GMT

Bankruptcy Law May Be Modified
Chicago Tribune

Congress is poised to give bankruptcy judges more power to modify primary home mortgages in an attempt to halt the foreclosure crisis, a move Democrats and housing advocates have been pushing for two years in the face of stiff opposition from Republicans and the mortgage industry.

The House of Representatives is expected to pass the legislation Thursday.

The measure would temporarily remove an oddity in bankruptcy law: Judges can reduce or cram down the principle on a vacation home, car, or boat, but they cannot do it to a mortgage for a primary residence.

CA Legislature Passes 90-Day Foreclosure Moratorium
Housing Wire

The California Legislature, as part of the recently-passed budget package, approved Friday, legislation SB2X-7 and AB2X-7, which provide for a 90-day foreclosure moratorium.

The bill, introduced by Sen. Ellen Corbet (D-San Leandro), covers owner-occupied homes where the first loan was recorded between Jan. 1, 2003 and Jan. 1, 2008. “Many people in our communities are facing the terrible specter of foreclosure,” Corbett said, according to the San Francisco Chronicle. “I’m just trying to find a way to help.”

Realogy Posts $1.9-billion Annual Loss
Los Angeles Times

Buyout firm Apollo Management agreed to invest as much as $150 million in Realogy Corp. after the real estate broker reported a 2008 loss of $1.91 billion.

Realogy, owner of the Century 21 and Coldwell Banker brands, said that Apollo would provide the "equity infusion" only if necessary and that it might not need the full amount. Realogy said it remained in compliance with debt agreements, according to a regulatory filing Wednesday.

New-Home Sales in U.S. Plunge to Record-Low — $309,000
Bloomberg

Sales of new homes in the U.S. plunged in January to a record low as soaring unemployment and mounting foreclosures drove buyers away.

Purchases dropped 10 percent to an annual pace of 309,000, the lowest level since data began in 1963, the Commerce Department said today in Washington. The median price decreased 13.5 percent, the most in almost four decades.

Moody’s May Downgrade More Subprime-Mortgage Debt
Bloomberg

Moody's Investors Service raised its loss estimates for $680 billion in U.S. subprime residential mortgage-backed securities issued between 2005 and 2007 and put them on risk for possible downgrade, the latest hit to the ailing financial system.

The ratings agency also said by the end of the year, one-third of subprime borrowers who are currently paying on their mortgages will become delinquent and eventually default, representing 19% of outstanding loans.

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Bankruptcy Law May Be Modified