August 24, 2015
Debt Collection in Flux
Bloomberg BNA Banking Daily quoted me in Loans in Flux as Appeals Court Rebuffs Midland Funding (behind a paywall). It opens,
Lenders, investors and others are watching to see whether the U.S. Supreme Court is the next stop for a case raising questions about how a host of loans are collected, purchased, structured, and priced (Madden v. Midland Funding LLC, 2015 BL 162010, 2d Cir., No. 14-cv-02131, 5/22/15).
At issue is a May ruling by the U.S. Court of Appeals for the Second Circuit that said a debt collector cannot claim protection from state-law claims under the National Bank Act for loans acquired from a national bank (100 BBD, 5/26/15).
The ruling, which jolted banking lawyers who say the decision upsets expectations that assignees may charge and collect interest at rates that were valid at origination, hit with renewed force Aug. 12, when the Second Circuit turned away a petition to rehear the case (156 BBD, 8/13/15).
New questions about the impact of the case arise almost daily, but for many the main question is whether the debt collector, Midland Credit Management, will take the case to the U.S. Supreme Court.
Many expect the company to seek review by the justices. Midland has until early November to do so.
Brooklyn Law School Professor David Reiss isn’t making a prediction, but ticked off a list of factors that might make the difference, including a possible circuit split, questions raised by the case that have “serious doctrinal consequences” for the National Bank Act and other federal statutes, and the potential for friend-of-the-court briefs by the banking industry to grab the justices’ attention.
“While it is a fool’s game to predict confidently which cases will be picked up by the Supreme Court, this case has a bunch of characteristics that make it a contender,” Reiss said Aug. 17.
August 24, 2015 | Permalink | No Comments
August 21, 2015
Friday’s Government Reports
- The Department of Housing and Urban Development (HUD) and the Census Bureau have released July’s New Residential Construction Statistics. According to the federal agencies building permits are up 7.5% over last July, while housing starts are up 10.8% and completions are up 14.6% during the same period.
August 21, 2015 | Permalink | No Comments
August 20, 2015
Thursday’s Advocacy & Think Tank Round-Up
- Community Builders, an initiative of the Sonoran Institute has released Place Value: How Communities Attract, Grow and Keep Jobs and Talent in the Rocky Mountain West recommends walkability and quality of life conscious development of communities .
- According to the National Association of Realtor’s analysis of the New Housing Starts data homebuilders are increasingly developing high density housing with “walkability” suburban and single family housing has been deemphasized.
- The Urban Institute released its Housing Finance at a Glance monthly chartbook, which Prof. Reiss finds to be a very helpful holistic view of the mortgage industry.
- The U.S. Department of Housing and Urban Development (HUD)’s Office of Policy Development and Research has developed the Creating Connected Communities: A Guidebook for Improving Transportation Connections for Low and Moderate Income Households in Small and Midsize Cities – the guidebook contains recommendations geared toward cities with 250,000 or fewer residents which among other things suggest a refocus of financial resources on critical needs and improvement of the alignment between housing and transportation investments.
- Zillow has announced that home prices are rising faster than incomes for most Millenials (no surprise there). This report also finds that first time home buyers rent for longer before buying typically more expensive homes which are paid for with a larger share of income.
August 20, 2015 | Permalink | No Comments
August 19, 2015
Wednesday’s Academic Roundup
- The Impact on LEED Neighborhood Certification on Condo Prices, Julia Freybote, Hua Sun & Xi Yang, Real Estate Economics, Vol. 43, Issue 3, pp. 586-608, 2015.
- Information Externalities, Neighborhood Characteristics and Home Mortgage Pricing and Underwriting, Ioan Voicu, Irina Paley, Andres E. Lopex, Irene Fang, Real Estate Economics, Vol. 43, Issue. 3, pp. 719-749, 2015.
- Do House Price Levels Anticipate Subsequent Price Changes within Metropolitan Areas?, Nai Jia Lee, Tracey Seslen & William C. Wheaton, Real Estate Economics, Vol. 43, Issue 3, pp. 782-806, 2015.
- Foreclosure Discount: Definition and Dynamic Patterns, Hangqing Zhou, Yuan Yuan, Christopher Lako, Michael Sklarz & Charles McKinney, Real Estate Economics, Vol. 43, Issue 3, pp. 682-718, 2015.
August 19, 2015 | Permalink | No Comments
August 18, 2015
Tuesday’s Regulatory & Legislative Round-Up
- The Consumer Financial Protection Bureau has launched an Online Guide for Real Estate Professionals to understand their obligations under the new “Know Before You Owe” mortgage disclosure rules, which become effective October 3, 2015. The Know Before You Owe mortgage initiative is designed to empower consumers with the information they need to make informed mortgage choices. It includes the implementation of the TILA-RESPA (Truth in Lending Act – Real Estate Settlement Procedures Act) Integrated Disclosure rule. The new rule primarily does two things, first it consolidates some of the disclosures that must be made unto fewer forms and second it changes the timing of certain activities in the mortgage lending process.
- Fannie Mae and Freddie Mac have announced an auction of Non-Performing Loans (NPLs) in the amount of 1.2 billion and provided details for bidder pre-qualification and servicer requirements. The reasons for the program are fourfold: 1. reduce illiquid assets, 2. encourage broad investor participation; 3. consider borrower outcomes; 4. a well controlled transparent process.
- The New York City Council has passed three Tenant Buyout Bills which were designed to protect tenants from landlords who want them out of rent stabilized apartments.
- The Bills are: Intro 682 – buyout offered in a threatening manner are an act of harassment. This includes untoward language, odd hour contact, frequent contact, and abusive contact.
- Intro 700 – requirement of a writing to memorialize the buyout offer, this writing must include important facts including the tenant’s right to seek legal representation and the right to refuse.
- Intro 757 – Bars repeated buyout offers by making such behavior a form of harassment when the tenant has indicated she/he is not interested.
August 18, 2015 | Permalink | No Comments
August 17, 2015
Monday’s Adjudication Roundup
- Plaintiffs in class action suit against JPMorgan Chase & Co., who were fraudulently charged unnecessary home inspection fees, argue that the bank cannot avoid class certification because Chase admitted that “determining whether an inspection was reasonable requires an assessment of the borrower’s and property’s individual circumstances.” The plaintiffs claim “Chase cannot turn back time and do now what it was required to do then.”
- Deutsche Bank AG and Massachusetts Mutual Life Insurance Co. settle in suit accusing Deutsche Bank of misleading investors over approximately $125 million in residential mortgage-backed securities by failing to determine the accuracy of the statements in its offering documents.
August 17, 2015 | Permalink | No Comments
