S. 256, the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” would create a needs-based formula that change how some individuals could file for bankruptcy protection. The bill was introduced by Sen. Charles Grassley, R-Iowa, with co-sponsor Sens. Orrin Hatch, R-Utah; John Thune, R-S.D.; Thomas Carper, D-Del.; Ben Nelson, R-Neb., Richard Shelby, R-Ala., Jeff Sessions, R-Ala., and Michael Enzi, R-Wyo.

Both the House and Senate have passed bankruptcy bills in the past three years, but conferees have been unable to overcome language hurdles to reconcile language in the respective chambers’ bills. For the past two years, the bills have languished because of a provision insisted on by Senate Democrats that would prevent protesters at abortion clinics from using bankruptcy laws to avoid paying court damages.
 
As with previous bills, S. 256 would require people who file for bankruptcy protection but who are able to pay off some of their debts to work out repayment plans. A critical component of the bill creates a "means test" that would close a loophole in current bankruptcy law that in essence encourages people to file for bankruptcy as a means to avoid paying their debts.

The means test would notionally steer people away from Chapter 7 of the Bankruptcy Code, in which their debts would be eliminated. Instead, they would be steered into Chapter 13 payment plans, which would require filers to pay back a portion of their debt.

“The bill contains many provisions that restore the principles of fairness and personal responsibility to our bankruptcy system,” according to a statement from the Coalition for Responsible Bankruptcy Laws, of which the Mortgage Bankers Association is a member. “The legislation also protects, and enhances, the rights of the consumer. Additionally, the compromise requires creditors to take on additional responsibilities, and proposes new disclosures and other educational provisions.”

Other provisions of the bill would strengthen protections for child support and alimony payments and provides for consumer education.
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Guests arrived on January 19 in full “Texas” attire to attend the renowned Black Tie & Boots Gala. The "hottest ticket in town" allowed guests to enjoy an evening of socializing with the best of D.C. and view President Bush with his family when they made their appearance. This event was hosted by the Texas Society and has been a major event during Republican inaugurations since 1981.

Following a late night, guests rose early to head to the Capitol for the official swearing-in ceremony. The legislative affairs team at MBA secured first-class tickets to the ceremony. As a result, despite the crowds the Millennium members had a second-to-none viewing of this historic event. After the ceremony, the group attended various hospitality suites to view the Inaugural Parade. On a cold January day, the prospect of watching from inside with food and drink was a much preferred alternative to the frigid temperatures outside. Each suite was located along the Pennsylvania Ave. parade route, so guests had the chance to see the President and the rest of the parade.

Prior to attending an Official Inaugural Ball that evening, MBA hosted a special MORPAC dinner at DC Coast, a noted local restaurant. During dinner, MBA staff and MORPAC Millennium members discussed the legislative accomplishments of 2004 and the top advocacy priorities for 2005. After dinner the group went to the Washington Convention Center to attend an Official Inaugural Ball.
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In February’s issue of Mortgage Banking, Michael Lipson, executive vice president and Kathryn Marquardt, senior vice president and managing director with GMAC Commercial Mortgage Corp ., Horsham, Pa., explore the complex relationships and the growing demand for information-sharing, which has made the business of commercial mortgage servicing more about managing the flow of information than ever before.

For more information, visit www.mortgagebankingmagazine.com
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Cambridge Chairman Jeffrey Davis said the loan refinanced four properties and funded the acquisition of a fifth property. The five nursing homes were packaged as a group for the purpose of obtaining a mutually advantageous funding package, he said.

Each of the properties had separate first and second mortgages with both secured and unsecured debt. “With the debt consolidating arrangement, the borrowers were able to develop a new banking relationship with a single lender and obtain a lower rate,” Davis said.

The bridge loan funded The Courtyard Nursing Home of Orlando, Bayside Nursing Home of Northbay Village, Palmetto Nursing Home of Hialeah, Renova Nursing Home of Lake Park and Woodbridge Nursing Home of Tampa. The properties hold between 85 beds to 120 beds. The rate for the conventional bridge loan was LIBOR plus 3.5 percent floating.

Cambridge did not disclose the lender, but Davis said various finance companies have been active in senior housing and healthcare over the past three or four years with some lenders holding a longer tenure.

Davis said experienced lenders put lending teams together and develop appropriate due diligence and underwriting standards needed for senior housing. "Because of the large scale defections and capital shortages, these companies have been able to obtain above market yields with below-market risk.

“These finance companies have developed an excellent strategy and should continue to be a factor in the market. New competitors may surface as the year progresses, but there should be plenty of business available,” Davis said.
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As a result of an initiative to increase quality educational opportunities for the next generation of commercial/multifamily mortgage bankers, five institutions received grant monies over a five-year period. The schools are Colorado State University, Texas A&M University, University of Nebraska-Omaha, University of San Diego, and the University of Wisconsin-Madison. Each institution has filed their report with the MBA's University Task Force.

"By leveraging the grant monies, the universities and their program directors have made great strides in promoting commercial real estate finance and multifamily education," said Dan Thoms, vice president of MBA education and business development. "MBA is very proud of their achievements in implementing the goals of this important initiative."

Cumulatively, these institutions have revised and added courses in their curriculum, increased their student enrollments, developed new degree programs, facilitated new relationships, and secured additional funding to support endowed chairs.

Backed with the support of MBA's grant, Colorado State University sought additional funds for its Center for Real Estate to revise the curriculum, and endowed the first endowed chair the College of Business, with Professor Glenn Mueller. E. Michael Rosser, CMB, AMP, MBA University Task Force member and vice president of national accounts with United Guaranty Corp. in Englewood, Colo, said Mueller “is a welcome and exciting addition to the university."

As a result of the grant, Texas A&M University revised many of their real estate courses and created a greater real estate program presence in its community.

"Not only did the grant serve as a catalyst for the University of Nebraska to secure an additional funding for an endowed chair in Real Estate, it generated a significant increase in commercial real estate course offerings and in the number of students enrolling in the real estate degree program," said Rodrigo Lopez, CMB, MBA University Task Force member and president and CEO of AmeriSphere Multifamily Finance L.L.C., Omaha, Neb.

When the University of Wisconsin-Madison recognized the need for a capital markets program, it used funds to implement a two-year program focused entirely on commercial real estate finance.

The University of San Diego (USD) secured a $5 million endowment to create and name the Burnham-Moores Center for Real Estate, one of only a handful of substantially endowed real estate centers in the United States.

"The Burnham-Moores Center also then launched a new Master of Science in Real Estate degree program to continue its climb toward world-class recognition," said Daniel Phelan, CMB, CRI, MBA University Task Force Chairman and president and CEO of Pacific Southwest Realty Services in San Diego.

"This 11-month, full-time program is fully complemented and the first class consists of 24 students, all of whom will be attending MBA's Commercial Real Estate Finance/Multifamily Housing Convention as part of their curriculum,” Phelan said. “MBA's $100,000 grant in 2000 served as a catalyst for accelerating the growth of the USD real estate program."

As this five-year funding initiative comes to an end, the Commercial University Task Force will meet at MBA's Commercial Real Estate Finance/Multifamily Housing Convention & Expo in San Diego next week. The Task Force will discuss the progress made by these five universities, as well as future initiatives such as an internship program for students enrolled in these institutional programs.

For more information about this initiative, contact Thoms at (202) 557-2915.
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“The dot-com event created a maturity level among the buyer,” said Elizabeth Green , vice president of marketing at  3t Systems, Denver. “It’s created a more self-educated buyer [performing] a higher level of due diligence for a proposed solution.”

“The dot-com era did bring a realization that there is an automated way of doing business without having someone sitting on the phones, but I think it brought a little bit of fear when all of them started to fail and they failed so quickly,” said Robert Phelps, vice president of MortgageFlex Systems Inc., Jacksonville, Fla.

Industry veterans remember, however that many mortgage dot-coms never made it past the year 2000 or wound up sold or purchased.

“Several players tried to come in to be the portal, such as IMX and Lion Inc., to be the big exchange between the brokers and the lenders,” said Blake Scheifele, president and founder of No Red Tape Mortgage, Sherman Oaks, Calif. “Basically, the industry did not want another middle man. But it helped to put dollars into technology and people became used to looking at automated engines. Many software companies came out of that whole thing and [mortgage] companies started building their own technologies. Nobody really wanted the [exchange] interface because it took away from profits for everybody. The portals were not successful at all.”

Greg Smith, president and CEO of Advectis, Inc., Alpharetta, Ga., compared mortgage dot-coms in 2000 to last second “Hail Mary” passes in football. “Even if we did not have the [dot-com] crash, many of those companies would have crashed,” Smith said.

"Because dot-coms fell so fast, there is a general fear that it is going to happen again and I think [lenders] are much more cautious," Phelps said. "Also, large technology companies are much more cautious to put their foot into the arena without having done their due diligence."

“Mortgage bankers are, by nature, very conservative. They have to be in assessing risk. They are a very risk averse group. Even the lenders who have been more successful in technology have really grown that presence incrementally,” Smith said.

No Red Tape Mortgage, a national wholesale jumbo lender founded in 1998, started with a Web site and struggled against competitors such as IMX and Lion. The company switched to a paperless environment in 2000. Last October, No Red Tape Mortgage signed with Commerce Velocity, Irvine, Calif., to implement CQ BrokerConnect, an automated engine that will replace the current system within the next 60 days.

“The real portals are Calyx and Ellie Mae [ePASS ] because they are serving a true purpose and they are not saying they will take a huge chunk of money out of each transaction,” Scheifele said. “They’re the LOS [loan origination software] for the brokers, the loan processing system, and everyone is using two of them now. All the competitors were kicked out.”

Green, whose company offers the Mortgage Cadenceproduct, said the stability of mortgage technology firms became an important consideration when mortgage lenders made decisions to move forward on a project. “There is a perceived stability factor that can overshadow other factors,” she said.

MortgageFlex's more than 20 years in the mortgage industry did not hurt its stability factor. Phelps said MortgageFlex did significant due diligence to ensure that the technology would be there to accomplish its objectives following the dot-com fallout. “Ours was business as usual,” Phelps said. “If we did anything, it was to let people know that we were still going to continue down the same track. Just because the dot-com industry decided to take a dive did not mean that technology was taking a dive.”

Smith co-founded Advectis in 2001. The company provides an electronic folder of paperless documents through its Web based product called BlitzDocs. “The vision was how to collaborate on loan documents but, at the time, everything was paper,” Smith said. “Now, we have native electronic documents that never turn into paper.”

In its paperless environment,  No Red Tape Mortgage now scans all documents into the system and processes them electronically. The electronic documents then reverts back to paper at the closing table.

Analysts say the true e-mortgage is three to five years away but it requires acceptance from Wall Street conduit investors and county recorders.

“The only lenders who are realizing a true e-mortgage are the ones who portfolio their own loans,” said Josh Stallings, vice president of strategic initiatives at No Red Tape Mortgage. Stallings said the company will not invest in e-mortgage capabilities because investors, at present, do not accept true e-mortgages.

MortgageTree Lending, Modesto, Calif., started two years ago in the paperless environment. The company originates and processes paperless loans and sends the paperless packages to its post-closing department. On the front end, it maintains a face-to-face relationship with its borrowers. The investor delivery process remains on paper.

“There is more of a hybrid approach now but, certainly, most of the source documents remain paper,” Smith said.

Stallings said investors will gradually move toward acceptance of SMART Docs and packages in the hybrid model. Countrywide Home Loans, Calabasas, Calif., accepts a hybrid model of an e-mortgage, in the form of PDFs, and the hybrid paperless mortgage is starting to gain acceptance in the mortgage industry, Stallings said.

No Red Tape Mortgage said it now has a 99 percent paperless hybrid model in its underwriting package to investors and it would take 24 hours to add the electronic signature component. “Fannie Mae and Freddie Mac will probably be ready sooner with true e-mortgages and that will help to fuel the Wall Street firms to do it,” Scheifele said.

Advectis and the BlitzDocs platform will not lead the charge toward an e-mortgage, but Smith said he does believe a true e-mortgage will be a reality one day.

“I’ve seen a lot of people in front who had so many arrows in the back that it is going to be hard [for them] to recover,” Smith said. “I prefer to be a real fast follower.”
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