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25 » VISIT US ONLINE @ DSNEWS.COM HOUSE COMMITTEE APPROVES AMENDMENT TO BANKRUPTCY CODE FOR LARGE BANKS e House Judiciary Committee approved bipartisan legislation that is aimed at speeding up the bankruptcy process and preventing taxpayers from taking the hit in the event of the failure of large financial institutions. e law, known as H.R. 5421 or the Financial Institution Bankruptcy Act of 2014, was approved by a voice vote on September 10. Under the new law, a subchapter added to chapter 11 of the bankruptcy code requires large financial institutions to maintain transparency and creditor priority. e bill was praised by Democrats and Republicans alike, including House Judiciary Committee Chairman Bob Goodlatte (R-Virginia), ranking member John Conyers (D-Michigan), and Regulatory Reform Subcommittee Chairman Spencer Bachus (R-Alabama). "We strongly support the committee's passage of the bipartisan Financial Institution Bankruptcy Act today," Goodlatte, Conyers, and Bachus said in a joint statement. "is bill was carefully calibrated to strengthen our nation's bankruptcy laws and to ensure that the bankruptcy process is well equipped to resolve companies of all operations and sizes. is legislation enhances the Bankruptcy Code and its ability to resolve financial institutions in an efficient and value-maximizing manner for the benefit of the U.S. and global economies, employees, creditors, and customers." Detractors of the new bill defend the Orderly Liquidation Authority, or OLA, which was the system set up by the Dodd-Frank Reform Act in 2010 to mitigate the risk of large financial firms that are failing. Supporters of the Financial Institution Bankruptcy Act believe it is superior to OLA, arguing that OLA gives too much power to regulators and politicians in the case of a failing bank and as a result, taxpayers would lose billions. OLA supporters say that it provides the necessary flexibility to quickly provide aid to big bank creditors to stop a crisis, and that assessments placed on big banks after the crisis abates would cover any taxpayer money used. e backers of the Financial Institution Bankruptcy Act say it will expedite the bankruptcy process with a speedy judicial review and quicker transfer of assets from the bank to a bridge company that will attempt to save the institution without affecting the business's operations. e committee's goal by passing the new legislation is to prevent a repeat of the lengthy and costly Lehman Brothers bankruptcy, which was filed in 2008 and is just now being completed. LOAN MODS DOWN, FORECLOSURE STARTS UP IN JULY e total number of homeowners receiving permanent loan modifications declined in July, as did the number of modifications made under the Home Affordable Modification Program (HAMP), according to figures released this week by HOPE NOW. Including both HAMP and proprietary programs, permanent completed modifications totaled 35,402 in July, according to HOPE NOW, down from 38,489 the month prior. e decline reflected a drop in both the number of proprietary mods, which totaled nearly 25,000 compared to June's more than 27,000, and in the number of HAMP mods, which fell to 10,177 from 10,813 in June. Since 2007, HOPE NOW estimates nearly more than 7.1 million homeowners have been granted a loan modification, including 1.4 million made through HAMP (dating back to 2009). Factoring in short sales, deeds in lieu of foreclosure, and other workout plans, the group reports that servicers worked with homeowners to come up with nearly 157,000 solutions to avoid foreclosure. Meanwhile, foreclosure starts rose a little more than 1,000 from June to settle at 70,401, the highest level of starts since January. rough the first seven months of 2014, foreclosure starts totaled nearly half a million; for all of 2013, starts came to an estimated 1.2 million. Meanwhile, completed foreclosure sales rose to 38,428 compared to 36,826 in June. Extrapolating from data provided by the Mortgage Bankers Association (covering approximately 88 percent of the industry), HOPE NOW estimates the number of loans with delinquencies of 60 days or more came to nearly 1.86 million, down from 1.88 million in June. e percentage of total loans overdue by 60 or more days stayed constant for the 11th straight month at 4 percent. Can loan servicing be personal? Using modern, cloud- based technology and dedicated support teams, we shape our operations to how our clients do business. Learn more at bsifinancial.com/personal The new standard for performance. 972.347.4350 sales@bsifinancial.com

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