Welcome to Part II of our series on the servicing of discharged mortgage debt (catch up on Part I). This part will discuss communications to discharged borrowers and evaluate various disclaimers that can be utilized.
Mortgage servicers are plagued by their nebulous relationships with the borrowers who discharge their personal liability in bankruptcy. Issues arise when the borrower whose debt has been discharged continues to engage with the mortgage servicer. These activities include making monthly payments and requesting and participating in loss mitigation. There are few, if any, bright line rules regarding this common scenario.
On December 22, 2018, the federal funding for certain agencies lapsed, and the United States government entered into a partial shutdown. The U.S. Department of Justice (DOJ), including the United States Trustee Program (USTP), was one of the agencies that shut down. United States Trustees (“UST”) representing the USTP appear and litigate in a multitude of bankruptcy proceedings. USTs also actively participate in out-of-court settlement discussions, plan negotiations, and the like.
The Pension Protection Fund (PPF) has published guidance on company voluntary arrangements (CVAs), setting out the issues that it expects to be considered and addressed. The new guidance will be relevant to companies who are considering a CVA which could affect a DB pension scheme, and to advisers working with those companies or with pension scheme trustees.
The government has published a consultation paper looking at ways to improve the framework surrounding companies in or approaching insolvency. The policy objective is to reduce the risk of major company failures and their impact on a wider range of stakeholders, including employees and company pension scheme beneficiaries.
In an article that first appeared in the Winter 2017 issue of RECOVERY, Matthew Tait, Partner at BDO, and Matt Hill, Senior Associate at Osborne Clarke, put together a blueprint for practitioners considering turnaround work.
As the effective date for the CFPB’s successor in interest and bankruptcy billing statement requirements quickly approaches, one question we’ve heard multiple times is whether a mortgage servicer is required to know when a confirmed successor in interest is in bankruptcy. The question stems from upcoming provisions in Regulations X and Z that will collectively say, in essence, that a confirmed successor in interest must be treated as if he or she is a borrower for the purposes of the mortgage servicing rules.
Spanish Congress debates a legislative proposal (Propuesta de Ley) to reinforce the fight against late payment in response to the European Union demand for the correct implementation of the Insolvency Directive (2011/7/EU). This proposal would establish a penalty system against defaulting companies.
Law360
Even if you haven’t purchased any bitcoin, you have likely heard about the cryptocurrency that was approaching $20,000 per coin late last year. The record high was quickly followed by a dramatic fall in value over 16 days in early 2018 — crashing to below $7,000. Since that time, bitcoin has been staging its recovery, and as of this writing, sits at slightly over $9,000 per coin. Not a bad place to be, considering bitcoin’s humble valuation of $.08 per coin back in 2010. It seems that despite its roller coaster persona, bitcoin is here to stay.
Municipal bankruptcies under Chapter 9 of the Bankruptcy Code, 11 U.S.C. §§ 901-946 (Chapter 9), are rare. These cases are often filed to adjust bonded indebtedness and pension obligations. Congressional authorization for Puerto Rico and its instrumentalities to file for bankruptcy under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) was similarly out of concern for excessive bond debt and pensions.