World important news by Criselda

Mass. court rejects developer bid in transfer case

Thu, 20 Oct 2011 03:38:11 -0400

By Ross KerberBOSTON, Oct 18 (Reuters) - A developer who acquired property in a faulty transfer cannot sue the original owner, Massachusetts’ highest court ruled on Tuesday, the second time it has sided with a homeowner in a high-profile housing case this year.The decision by the state’s Supreme Judicial Court turned on technical reasons and left the developer facing the prospect of suing banks and title companies that had left him with faulty documentation, rather than the original homeowner.The result could make it easier for individuals to fend off financial companies in similar cases elsewhere, said an attorney who had argued against the developer’s case.”The banks are the ones that violated the law, so why should homeowners have to pay for the violations?” said Max Weinstein, an attorney and Harvard Law School lecturer who had filed a friend-of-the-court brief on behalf of the homeowner.An attorney for the developer, Francis Bevilacqua, did not immediate return messages.Housing industry executives had previously warned a ruling against Bevilacqua could destabilize the real-estate finance system.SECOND CASE FOR COURTIn January, the state’s highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after they failed to show they held titles at the time of the foreclosures.Issues of foreclosures done without proper documentation have flared up nationwide as banks and regulators grapple with the aftermath of the housing boom and the loose oversight that accompanied it.In this case, banks and mortgage companies had lined up behind the developer, while state officials and housing activists had cited his claims as examples of a flawed system.The matter began when US Bancorp transferred to Bevilacqua the title for a building in Haverhill, Massachusetts, a suburb north of Boston. He turned it into four condominiums.In a bid to establish clear title, Bevilacqua sued the previous owner who had been foreclosed upon. But a lower court ruled that Bevilacqua did not hold title to the property and said his lawsuit would be better directed at those that gave him the faulty title.The original owner and defendant in the suit, Pablo Rodriguez, has not appeared at hearings or filed motions in the case.The Supreme Judicial Court upheld the lower court ruling dismissing Bevilacqua’s lawsuit, but left the door open for him to refile his lawsuit in a different form.The case in the Supreme Judicial Court of Massachusetts is Francis J. Bevilacqua III vs. Pablo Rodriguez, SJC-10880.

Brewers Fielder chokes up with future in doubt

Mon, 17 Oct 2011 14:57:49 -0400

“It was awesome,” Fielder said, clearing his throat as he spoke to reporters about the standing ovation he received at Miller Park in the series-ending Game Six.The 27-year-old Fielder, a three-times All Star who this year was second in Major League Baseball with 38 home runs, and whose 120 runs batted in were second most in the National League, has said he doubted the Brewers will pay him the sort of long-term deal he should command.Fielder said he appreciated his years in Milwaukee.”It was awesome playing here, I’m just glad I was able to have the fun that I had,” he said. “It was cool. It was cool.”The burly, bearded slugger said it was disappointing to come up short in their bid to reach the World Series but that the wild card Cardinals were deserving winners.”They just played better. They played great baseball, give them the credit. They were hitting, they made the pitches when they had to. They just beat us.”Fielder said he had no regrets about the season the NL Central champion Brewers had.”We had a great year as a team. Unfortunately, we didn’t get where we wanted to, but great memories.”As long as I play as hard as I can, I can sleep at night,” he said. “That’s it, time to play with the kids.”First, the big home run hitter had farewells to say.”Got to say goodbye to my team mates because it’s the off-season now. I’m not going to be seeing them every day.”I had a couple of ‘clear-the-throat moments,’” he admitted. “I love these guys. I’ve been playing with most of them since I was 18.”

Banks adapt covereds in search for cheap funding

Fri, 14 Oct 2011 08:17:23 -0400

Covered bonds have become the go-to funding tool for banks as investors increasingly favour secured issuance over all else, and the pricing differential between senior and covered remains elevated.However, limits on the type of collateral that can be used under current covered bond legislation mean that banks are now seeking to make use of other assets sitting on their balance sheets.The new style covered bonds would offer many of the sought after characteristics of the traditional product, but would differ most significantly in their use of a wider range of assets beyond mortgage and public sector collateral.”These bonds will provide dual recourse to the issuer, collateralisation by a dynamic cover pool and allow issuers to sell fixed rate covered bonds with bullet maturities which is quite unusual in the RMBS market,” said Boudewijn Dierick, covered bond structurer at BNP Paribas.According to a recent S&P report summarising the discussions at a True Sale International conference in September, structured covered issuance would allow funding for assets that are not eligible for German legislation-enabled bonds, such as loans to small- and mid-sized enterprises, trade or leasing receivables, and consumer loans.S&P added that despite issuers looking for news ways of structuring secured funding: “traditional German covered bond issuers are likely to continue to distinguish their product from newer developments.”Bankers say that German issuers with significant price differentiation between their senior and covered debt are likely to benefit most from any new structures. The current range of between 150bp and 200bp makes it almost impossible for certain banks to sell unsecured paper.Deutsche Pfandbriefbank is already looking at the possibility of using structured covered bonds for 2012. “High over-collateralisation requirements highlight the need for alternative approaches, for example using non-encumbered assets and analysing the possibility of structured covered bonds,” the issuer said in an investor presentation published at the beginning of September.HOW MUCH?Covered bankers say it is still too early to tell where exactly a structured bond would price, although they estimate a level somewhere between an issuer’s regular covered bonds and its senior unsecured paper.”Anything you can fund in-between covered bonds and senior will be beneficial to banks in the current market,” said Ralf Grossmann, head of covered bond origination at Societe Generale.”The wholesale funding market is in bad shape but covered bonds are standing out as the funding instrument of choice. At the moment funding costs are increasing so any penny you can save will go a long way in reducing your overall funding costs.”Andrew Porter, global head of covered bonds at HSBC, thinks pricing will depend on the type of assets used, how much over-collateralisation is provided, and whether or not the issue is triple A rated.”If the issuer is using well-regarded assets, offering 30% OC, and a high rating then it will be more likely to price closer to covered bond levels as opposed to where senior unsecured paper is trading,” he said.TARGETING INVESTORSFor now, the challenge for issuers is to find an investor base for the new instrument, given that a certain breed of covered bond buyer would be unlikely to buy a watered down version of a product that they already view as safe.”These new structures would fall outside of the covered bond label and that is quite deliberate,” said Mauricio Noe, head of covered bond origination at Deutsche Bank.”Covered bond investors are not so rigid that they won’t consider a new structure that has the bank’s guarantee. There is definitely a market for these kinds of structures, but they will have to add a premium over special law covered bonds.”Banks for now are hoping that a portion of traditional covered bond buyers, investors that previously bought senior unsecured debt, and RMBS investors will be the likely owners of the new bonds.”Issuers are motivated to use this kind of structure where either they have spare capacity to encumber more assets or they can re-direct assets which would otherwise have been used for ECB repo funding,” said Porter.Noe agreed: “It makes sense to mobilise assets to lower the cost of funding for banks such as the Germans whose covereds trade so much tighter than senior, but for the French where there is less of a difference they may be better off to wait for more certainty on the bail-in discussions.”