Allison Pyburn

Debtwire — A New York bankruptcy judge ruled that student loan borrower Kevin Rosenberg's USD 221,385 loan held by Educational Credit Management Corp. should be discharged. In a written opinion, Chief Judge Cecilia Morris of the US Bankruptcy Court for the Southern District of New York said dischargeability standards for student loans are straightforward and her court would not participate in perpetuating myths to the contrary.

Debtwire — A Deutsche Bank restructuring could trigger an event of default in derivative contracts to which the troubled institution is a counterparty, according to typical contract language, a source familiar with such contracts and published reports. Depending upon the form of default, the defaulting counterparty may need to post collateral, otherwise restructure the agreement or find a replacement counterparty.

A US district court judge has affirmed a bankruptcy court decision in Lehman Bros. Holdings Inc., 553 B.R. 476, related to the flip clauses associated with 44 synthetic CDOs. Lehman is seeking to claw back roughly USD 1bn in payments to noteholders.

Debtwire — Shares of Navient continued to hover near 52-week lows today as investors weighed the latest state attorney general lawsuit against the embattled student loan servicer, along with a flurry of activity among shareholder class-action attorneys and the AFL-CIO. For ABS investors, the continually beating drum of state AG lawsuits may be reminiscent of early mortgage "crisis" days that led up to nationwide settlements — and debt forgiveness — which diminished private label mortgage bond cash-flows.

Debtwire — Pressure may grow on Navient Corp's ability to maintain revenue and refinance billions in upcoming bond unsecured bond maturities as technicals in the asset-backed securities market combine with slow student loan repayment and political headwinds, according to its year-end disclosures and Standard & Poor's, which downgraded Navient’s senior unsecured debt rating to BB- in December.

Debtwire — JPMorgan is likely to pay a de minimis amount of liability to fulfill Deutsche Bank’s estimated USD 6bn to USD 10bn in RMBS putback claims against Washington Mutual, based on a ruling by US District Court for the District of Columbia Judge Rosemary Collyer today.

Forbes — By Allison Pyburn If you invest in a retirement account or rely on a public pension, you may find yourself footing the bill for the U.S. Government's recent spate of headline mortgage settlements with the nation's largest banks. While the settlements promise billions in consumer relief, average consumers - and not [...]

Debtwire — The Chapter 7 bankruptcy trustee for beleaguered REIT Anthracite Capital has taken legal action following an investigation of BlackRock and the secured lenders that took over the company's nearly USD 20bn in CRE collateral, according to court filings. Trustee Albert Togut filed four complaints under seal on 15 March - the same day its two-year statute of limitations to do so ran out, according to court filings in US Bankruptcy Court for the Southern District of New York.

Financial Times — Institutional investors including PIMCO, BlackRock, Freddie Mac and the New York Federal Reserve opted to cut ties with a group of mortgage bond investors last summer that planned to do away with Countrywide mortgage servicing, according to two sources involved and an August 2010 email sent to 21 investors. The institutional investors went on to structure a USD 8.5bn settlement with Bank of America that could be binding to investors in 530 residential mortgage backed securities totaling more than USD 400bn in original face value.

Debtwire — Washington Mutual’s brief collapse into FDIC custody allowed Deutsche to pursue billions of dollars in potential RMBS representation and warranty breaches without the investor backing needed in traditional buyback cases, court documents show. Deutsche is similarly embroiled in a lesser-known lawsuit with the FDIC concerning 150,000 IndyMac loans held in more than 240 trusts.

Financial Times — A growing faction of mortgage bond investors are rallying to fight a potential “sweetheart” deal between Bank of America and a handful of friendly funds related to Countrywide Financial’s mortgage buyback saga, Debtwire reports. The investors fear talks led by some of the nation’s largest fund managers, including PIMCO and BlackRock, along with Freddie Mac and the New York Federal Reserve, could bind them to pennies-on-the-dollar payouts even though contractually Countrywide’s owner is required to repurchase all flawed mortgages at par, said two sources involved in the negotiations. A deal could materialise in as little as 30 days, they said.

Debtwire — In an effort to recoup assets backing a repurchase agreement with bankrupt Anthracite Capital, Bank of America on Wednesday settled a lawsuit against a retired baker, his family trust and defunct Bethany Group Holdings over guarantees relating to USD 50m in failed apartment acquisitions, according to court filings in the US District Court for the Southern District of New York.

Financial Times — Seth Wheeler, a senior advisor at the US Treasury Dept. who helped craft the Obama Administration's Home Affordable Modification Program (HAMP), has resigned, a Treasury spokesman confirmed to Debtwire.

Financial Times — A group of investors in mortgage-backed bonds dubbed the Mortgage Investors Coalition (MIC) recently submitted to Congress a plan to overhaul the refinancing of underwater borrowers by writing down the principal balances of both first and second mortgages. The confederation of insurers, asset managers and hedge funds hope to break a logjam between Washington DC and the four megabanks with the most exposure to writedowns on second lien mortgages, including home equity lines of credit. The private sector initiative coincides with House Financial Services Committee Chairman Barney Frank’s open letter dated 4 March to the CEOs of the banks in question – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo – urging them to start forgiving principal on the second lien loans they hold.

The Oregonian — DOZENS OF ENVIRONMENTAL GROUPS PETITION THE EPA FOR A BAN ON USING WASTE AS A FERTILIZER, WARNING ABOUT ITS CONTENTS By Allison Pyburn, Portland Oregonian, Oct. 12, 2003 For more than 30 years, Oregon's farmers have spread tens of thousands of tons of treated sewage sludge on their fields as fertilizer, assured by state officials that it is safe for people and crops.

The Oregonian — Scientists question safety of sludge Dozens of environmental groups petition the EPA for a ban on using waste as a fertilizer, warning about its contents ALLISON PYBURN For more than 30 years, Oregon's farmers have spread tens of thousands of tons of treated sewage sludge on their fields as fertilizer, assured by state officials that it is safe for people and crops. Now, a growing number of scientists and former government officials contend those assurances are unfounded. They say the government has done little testing to establish safe limits for an array of potentially toxic chemicals that can taint ordinary sewage.