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End of HAMP Heralds New Era in Loan Modification and Loss Mitigation for Lenders

Launched in response to the financial crisis of 2008, the federal Home Affordable Modification Program (HAMP) officially ended on December 31, 2016, with approximately 2.8 million homeowners having been granted permanent modifications to their mortgage loans. Recent reporting from the Treasury Department heralded HAMP as having been a success in many ways, and its conclusion…

A Rose By Any Other Name Might Not Smell As Sweet After All

A former U.S. President was widely ridiculed for saying that the answer to a question depended “on what your definition of ‘is’ is.”  In its April 27, 2017 decision in Under Armour, Inc. v. Ziger/Snead, LLC, the Maryland Court of Appeals demonstrated that the Executive Branch does not have a monopoly when it comes to…

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Supreme Court Reverses Approval of Structured Dismissal That Violates Fundamental Bankruptcy Priority Distribution Scheme

In a May 2015 opinion, the United States Court of Appeals for the Third Circuit approved the “structured dismissal” of the Chapter 11 bankruptcy case of Jevic Holding Corporation.  In Jevic, the secured creditors paid $2 million into an account to be used to pay the attorneys’ fees of Jevic and the Official Committee of…

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Ricketts v. Strange “Strange” How Simply Checking For a Bankruptcy Filing Can Provide a Complete Defense To a Lawsuit

Parties other than those who file for bankruptcy and discharge their obligations to creditors generally view a bankruptcy filing as a bad thing.  The filing of a bankruptcy case prevents creditors from foreclosing on collateral or suing to recover money owed to them and generally results in creditors being paid much less than they are…

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Fourth Circuit Protects Rights of Residential Mortgage Lenders In Chapter 13 Bankruptcy Cases

When a borrower files a bankruptcy case, for almost all purposes, what would commonly regarded as a single claim secured by collateral is subject to being treated as two claims: a “secured claim” in the amount of the value of the collateral securing the claim and an “unsecured claim” in the amount of the difference…

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The Perishable Agricultural Commodities Act: Whose Money Is This Anyway?

The Perishable Agricultural Commodities Act (“PACA”) has often produced unwelcome and unexpected results for parties unfamiliar with PACA.    Most often, the surprised parties are lenders who make what they think are secured loans to borrowers in the chain of distribution of produce who learn, when the borrowers experience financial problems, that their collateral is illusory. …

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Fourth Circuit Holds That Deposits to Ordinary Bank Account Are Not Transfers That Can Be Avoided By Bankruptcy Trustees

Section 548 of the United States Bankruptcy Code provides that a trustee can recover transfers made by debtors with actual intent to hinder, delay, or defraud creditors during the two years period prior to the filing of the bankruptcy case from the recipients of the transfers.  The Code defines “transfer” broadly to include any “mode,…

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Third Circuit Upholds Lender’s Right to Early Redemption Premium In Bankruptcy

On November 17, 2016, the United States Court of Appeals for the Third Circuit issued its opinion in In re: Energy Future Holdings Corp.  The Third Circuit reversed a ruling by the United States Bankruptcy Court for the District of Delaware that had been affirmed on appeal by the District Court that lenders were not…

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Federal Appeals Court Declares the Structure of the Consumer Financial Protection Bureau Unconstitutional

The United States Court of Appeals for the District of Columbia overturned an administrative order requiring a mortgage company (PHH) to pay $109 million, and in the process declared that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. [1] The administrative action against mortgage lender PHH arose out of an arrangement known…

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