CreditSlips

The following post comes to us from Professor Rasmussen at USC:

Nortel Bankruptcy Sets a Dangerous Precedent For the Future of Lending

The Federal Housing Finance Agency has finally announced a program to reduce principal balances of distressed home mortgages held by Fannie Mae and Freddie Mac, eight years into the foreclosure crisis. Too little, too late would be an understatement to describe this initiative.

The revised draft PROMESA bill (available here) is now under debate in Congress. The bill appears to respond to some early criticisms, although its length and complexity obscures answers to some important questions. Under the circumstances, it seems sensible for the Commonwealth to consider all of its options, including those that do not require Congressional action.

The Caesars examiner's report makes for interesting reading. Of particular interest for our readers might be its discussion of the role of the lawyers, namely those at Paul Weiss, who simultaneously represented the Caesars holding company, its operating subsidiary, and the holding company's private equity sponsor.

The Center for Responsible Lending has produced a nice, new empirical paper reflecting on and refuting the notion that certain debt collection reforms restrict the flow of consumer credit. The analysis is careful and impressive, and the natural laboratory experiment they found is fun and intriguing.