The survey found that 80 percent of Americans said the new law would deter them from filing for bankruptcy, while 20 percent would be more inclined to file for bankruptcy if they were overwhelmed with debt. Thirty-six percent of those surveyed were not in favor of the toughened bankruptcy rules. Although the majority of Americans are in favor of the new law, support weakened since June 2003, when the Index found 73 percent of respondents were in favor of toughened bankruptcy laws and 27 percent opposed it.

"The results...show that support for the new bankruptcy law, while still strong, has been declining since the Index last asked the question two years ago," said Jordan Goodman, spokesperson and financial analyst for the Cambridge Consumer Credit Index. "The biggest support for the law comes from white, older consumers with high incomes and more education, while the consumers who would be impacted the most-younger people with lower incomes and less education and blacks, are more opposed to toughening bankruptcy rules."

The "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" represents the first major reform of bankruptcy law in decades. The legislation raised the difficulty for debtors to discharge their debts under Chapter 7, and could force more people to repay their debts under Chapter 13 filings. The law, originally sponsored by Sen. Charles Grassley, R-Iowa, establishes a “means test” for measuring a debtor's ability to repay. People with insufficient assets or income could still file under Chapter 7 bankruptcy. However, Americans whose income is above the state's median income, through court determination, and who could pay at least $6,000 over five years, would move into Chapter 13 and ordered into a repayment plan. The bill also requires persons filing for bankruptcy to pay for credit counseling and allows for special accommodations for active-duty service members, low-income veterans and those with serious medical conditions.

Consumer groups argued against the bill, calling it “punitive” and asserting that it will harm families hit by genuine financial misfortune. But the Mortgage Bankers Association and the Coalition for Responsible Bankruptcy Laws , of which MBA is a member, supported the bill. The law includes a provision that removes the $4 million cap on single asset real estate (SARE) bankruptcies, of which commercial/multifamily lenders under previous law were vulnerable to abuses.

The overall Cambridge Consumer Credit Index jumped by 20 points from April to 71. The Index rose sharply on all three questions: past, present and future intensions. The "Reality Gap," which is the difference between the amounts of debt consumers said they would pay off in the next month versus the amount of debt they actually paid off a month later, soared to a record high 23 percentage points, up from 8 points in April. Eighty-four percent of Americans planned to pay off debt, while a month later only 61 percent actually did so in April.

"Debt is stressful for most Americans,” said Chris Viale, president and CEO of Cambridge Credit Counseling Corp. “It's a harsh reality that bankruptcy has become a normal solution in our society for those who may experience a loss of a job or unexpected medical emergency. These situations often catapult them into serious debt that they think they cannot overcome. We encourage consumers to consider financial education and credit counseling as the step before considering bankruptcy."
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You can’t pretend that dealing with mountains of paper documents isn’t slowing down the post-close audit process. And you can’t ignore the reality that eMortgages are on the horizon and that they will affect the way you and your competitors do business.

To remain competitive in this ever-changing environment, you must increase efficiency, increase accuracy and decrease the time it takes to complete the post-close audit process. How can you enhance your efficiency today? What’s the best way to maximize your investment in process improvement and automation?

CampusMBA, the education arm of the Mortgage Bankers Association, can help. CampusMBA presents an Audio Program, “Automating the Post-Close Audit in a Hybrid World,” on Wednesday, May 25 from 3:00-4:30 p.m. EDT. This program will discuss alternatives and issues for automating the post-close audit process, including:

• Scanning–New improvements, whether you are working from paper or are already scanning;
• Faxes–Newer multi-function devices enhance the processing and use of faxes;
• Emails–Your inbox is inundated with new emails every day;   Leverage email and prevent it from becoming a time vampire
• Mixed packages –Considerations for loan packages that are part electronic, part paper
• Data entry–How can you lower the cost of data entry required for the process?
• Data validation–What are optimal methods for validating loan data?
• Business Process Management–What are current trends and best practices?  And how do you leverage them?

Industry expert Jim Henderson discusses how to increase accuracy and decrease the time it takes to complete the post-close audit process. Henderson has spent the past 10 years in business process automation, first as a systems engineer and architect and as president of KeyMark. KeyMark began with scanning, OCR and automated forms processing at state department of revenues and moved to automation of electronic and paper billing and mortgage loan processes using integrated business rules engines, workflow, unstructured forms processing and document management. He has served with the HIPAA Electronic Claims Attachment Subcommittee and has spoken at numerous industry events including AIIM, ARMA and AICPA.

It's never been easier to train your staff on the most current topics relevant to your business. CampusMBA Audio Programs allow you and your staff to listen to a 60-minute presentation by an industry expert, followed by a 30-minute interactive question and answer session. Just dial in from your conference room speakerphone to train your staff - whether there are two or 20 employees in attendance.

The PowerPoint presentation that accompanies the audio program will be sent via email one week prior to the program date and can be reproduced for all attendees.

CampusMBA Audio Programs are a timely, convenient and cost-effective way to train your entire staff on the latest topics. Why register for an Audio Program?

• Inexpensive—$225 for MBA members/$325 for Nonmembers per site;
• Timely topics—regulatory and sales strategy issues brought directly to your speakerphone and conference room;
• Quality—program presentation materials developed by industry experts;
• Simple—just use your speaker phone; and
• Current—latest topics brought to you in a timely way

To register online, go to the CampusMBA Web site, www.campusmba.org, or call (800) 348-8653.
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The ABA survey found that nearly 90 percent of community banks find it “difficult” to hire compliance professionals. Additionally, it found that a majority of employers in the financial services industry expect to hire compliance professionals at an increased rate.

As a result, banks are looking internally to promote into positions of greater responsibility, particularly in compliance. “In some states it’s difficult to find qualified compliance professionals, so many banks use comprehensive training to develop and mentor from within,” said Diane Williams, ABA’s director of training and development. “Graduates can get in the door with broad-based skills that banks can build upon to meet certain needs.”

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With hurricane season beginning in a few weeks, a new poll shows that few residents along areas hardest hit by last year’s wave of hurricanes have not begun simple planning to protect themselves or their homes.

The survey by Mason-Dixon Polling & Research of 1,100 residents of 12 coastal states showed that 56 percent of those surveyed felt “not too vulnerable” or “not at all vulnerable” from hurricane threat. Nearly one in four said they would not prepare to protect their house against a storm, even after issuance of a hurricane watch or warning. Nearly 50 percent said they had no disaster plan for the 2005 hurricane season, which begins June 1.

This, despite 15 hurricanes or tropical storms that formed in 2004. Five major hurricanes struck the U.S., including four that had landfall in Florida over a six-week period (the fifth struck North Carolina). The storms killed 117 people; property losses totaled $42 billion; one estimate said one if every five homes in Florida were destroyed or damaged last year.

The National Hurricane Center predicts 13 Atlantic storms this season, which runs through November 30, including four “major” hurricanes.

The poll also found that misconceptions about hurricane preparation continued to manifest. For example, more than half of those surveyed falsely believed that masking tape could prevent windows from shattering; and 96 percent did not know that garage doors were the single structural element most vulnerable to failure in hurricane-force winds. Of a 20-question test on hurricane-related issues, 9 out of 10—89 percent—failed the test and only 2 percent answered at least 14 questions correctly.

The poll had an error margin of plus-minus 3 percentage points.
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P&PR researched 54 different markets across the country and found condominium construction to be the most pervasive of all property types. “Condo construction is soaring,” Fowlie said. “In the past six months ending in April, compared to the prior six months, the growth was 68 percent more in planning construction of condos. That was the highest for all the property types. Apartment units followed with a 49 percent increase.”

Fowlie said part of the reason for more construction planning includes a stronger economy, greater job growth and consumer spending. “A slowdown in any of these factors would really impact the market,” Fowlie said. “Interest rates will certainly have an impact on construction financing. We expect interest rates to rise but we are not expecting them to rise to the level that would deter building in markets.”

The pace between construction planning and getting permits to the time developers break ground can have an impact on the market in the next one to two years if the properties get built. “Not all of this will break ground but it shows a renewed interest in development,” Fowlie noted. “Once it starts to break ground and starts to go, the markets will need to be monitored very closely.”

Despite increases in retail and office construction planning, 23 percent and 12 percent, respectively, warehouse planning dropped by 17 percent. "Warehouse takes the shortest time to build," Fowlie said. "While warehouse is low relative to the other property types, there may be a masked risk here in that construction occurs more quickly compared to other property types."

Laura Stone Mortimer, managing economist at Torto Wheaton Research, Boston, said net absorption for industrial properties has been improving since the middle of 2004 as the nation’s manufacturers produce more with less people. Stone Mortimer said, however, that the use of technology rather than personnel spurs the growth of warehouses. “Accelerating in the 1990s and continuing today, much of the growth in industrial demand has originated with manufacturers and distributors moving to new state-of-the-art space to accommodate advances in equipment and technology, as well as net new growth in space needs,” Stone Mortimer said. “The cyclical improvement in market demand helping to support these upgrades along with the resulting stronger productivity yielded by new technology, are now driving demand for industrial space.”

Stone Mortimer said the actual amount of net absorption for the first quarter 2005 is 40.8 million square feet. “Historically, changes in inventories are volatile and have a low correlation with changes in net absorption. Industrial production, on the other hand, does seem to capture national and international turning points in the warehouse sector,” Stone Mortimer said. “Using industrial production in combination with local hiring trends does an even better job of capturing the effects of both the national business cycle and the effect of unique local industrial mixes.”

As of April, Stamford, Conn., the Washington, D.C. area, Charlotte, N.C. and the Inland Empire (San Bernardino and Riverside counties in southern Calif.) have the highest risk in the apartment market. Nashville, Sacramento, Palm Beach County and the Inland Empire hold the greatest risk for office construction planning. “We have not seen a lot of [speculative construction for office] in any market within the past few years but we are starting to hear more about it,” Fowlie said, noting Phoenix and Washington as markets with speculative planning.

P&PR data shows the Inland Empire (southern Calif.’s San Bernardino County and Riverside County) is a market at risk for apartment, office and retail construction planning. The Inland Empire showed planned office construction at nearly 23 percent of all office inventory at the end of February. “The Inland Empire office market has been changing over the past decade,” Fowlie said. “It never had much of an office market at all but there has been a lot of space built up there and developers are looking at that more as a viable office market.”
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Ashworth Mortgage Corp

Bob and Delores Hope, who had been active in all phases of the center with Dolores Hope as the Board Chairman of Eisenhower Medical Center, donated The Hope Square Professional Centre, adjacent to the center and the Heart Institute of the Desert. The 100-acre campus is in Coachella County.
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Please ask to join Beth Percynski's call with the Mortgage Bankers Association. Marsha Williams, chair of the committee, will moderate the call. This call is open to MBA members only and is closed to the media. For more information, go to MBA’s State & Local Initiatives Web site, http://www.mortgagebankers.org/state_update/.
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Transitioning from a paper to an electronic mortgage process can be a daunting task at first, but one that must occur in the current environment of increased competition and slim margins. To aid in understanding the components of such a transition, CampusMBA, the educational arm of the Mortgage Bankers Association, hosts a three-day eMortgage Technology Workshop June 15-17 in San Francisco.

This workshop is essential for anyone who is charged with procuring and deploying technology solutions to make their company’s mortgage process more efficient.  Session topics include the latest developments in eVaults, the systems that store electronic documents for safekeeping; eNotarization; applied cyberlaw; electronic records and signatures; and how to calculate your eMortgage return on investment (ROI). 

For more information and to register, please visit CampusMBA’s eMortgage Workshop Web site, at http://www.campusmba.org/index.cfm?STRING=content.cfm?section=254, or call (800) 348-8653 .

Attendees of this conference earn six points toward CampusMBA’s Certified Mortgage Banker (http://www.campusmba.org/index.cfm?STRING=cmb_content.cfm) and Certified Mortgage Technologist (http://www.campusmba.org/index.cfm?STRING=content.cfm?section=142) designations.
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The NCLR's report, “Reforming the Remittance Transfer Market," said money sent by immigrant workers in the U.S. to family members outside the country requires greater transparency to lower fees for wiring funds. In the report, NCLR called for policy reform to reduce the fees and hidden costs associated with wire transfers and for stronger efforts by banks and credit unions to reach Latino consumers with their low-cost remittance services.

Earlier studies by the Multilateral Investment Fund and the  Pew Hispanic Center in Washington said that lowering wire transfer company fees by 5 percentage points could generate annual savings of $1 billion for Hispanic households inside and outside of the U.S.

"To be fully part of America's 'ownership society,' Latinos must retain ownership of the money they earn so they can save, build assets and participate in the American dream through homeownership, a college education for their children and a comfortable retirement," said Janet Murguia, president and CEO of NCLR. "Market reforms in the remittance transfer industry can serve as the gateway for Hispanic workers to open bank accounts and use other financial services that can help them build wealth."

The median net worth of Hispanic households in 2002 was $7,932, compared to $88,651 for white non-Hispanic households. In 2002, 25.4 percent of Hispanic households did not own any assets other than a vehicle or unsecured liabilities, compared to 6.3 percent of white households, based on 1996-2002 statistics by the Pew Hispanic Center.

The NCLR report pointed to a lack of competition from banks and credit unions is one reason for the high fees. Seven in 10 Hispanics in the U.S. who send remittances use a wire transfer company, the reports said. NCLR said only 11 percent remit funds through a bank and 2 percent through a credit union, despite the fact that these financial institutions provide a wider menu of services at a lower cost.

"Workers and their families are needlessly losing money because wire transfer companies charge outrageously high transaction fees--often exceeding 20 percent of each transaction--which are not clearly spelled out,” Murguia said. “These practices take advantage of people who work hard and are helping to support their families. We urge Congress to act now to protect these workers and their hard-earned dollars."

The Mortgage Bankers Association operates a Spanish-language version of its www.stopmortgagefraud.com Web site, aimed at helping Hispanic borrowers. It includes a nationwide consumer education campaign designed to provide consumers with three important tools they can use to help prevent being subjected to abusive lending practices; a Borrower's Bill of Rights that provides a detailed listing of consumer rights during the mortgage transaction, from the first contact with a lender/broker to the closing of the loan; The Ten Warning Signs of Predatory Lending, that lists the 10 common warning signs of abusive lending practices.

Additionally, MBA participates in "Welcome Home," which provides a tuition free Internet-based training program designed by MBA to prepare past and present Spanish-speaking members of the armed forces for post-service careers in all phases of the residential and commercial lending industry.

Murguia noted that almost half of remittance senders do not have bank accounts, but studies show that they send an average of $100 to $300 a month to family members. “It is not only the right thing to do, but also the smart thing, for more financial institutions to offer low- or no-cost remittance services as part of checking or savings accounts, which would help these workers enter the financial mainstream," Murguia said.
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