Banking – Artwired Media http://artwiredmedia.com/ Mon, 28 Mar 2022 05:05:59 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://artwiredmedia.com/wp-content/uploads/2021/05/artwired-media-icon-150x150.png Banking – Artwired Media http://artwiredmedia.com/ 32 32 The government’s NBFC support program has only helped a few non-bank lenders https://artwiredmedia.com/the-governments-nbfc-support-program-has-only-helped-a-few-non-bank-lenders/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/the-governments-nbfc-support-program-has-only-helped-a-few-non-bank-lenders/

Beneficiaries of the scheme

Three debt bankers with knowledge of the program’s investments told BloombergQuint that aside from a few small NBFCs, it’s mostly well-established AA-rated NBFCs that have raised funds through the program.

The list includes entities involved in housing finance, asset finance, real estate finance, business lending, education and SME lending. BloombergQuint was unable to compile a full list of program borrowers.

The program ultimately ended up creating liquidity for just a handful of large NBFCs, said Raman Agarwal, regional NBFC chair at the Council for International Economic Understanding. “The broader NBFC universe continued to face a crisis during this period. Due to the short duration and the mode of financing, which has always been bonds, CPs or NCDs, small and medium NBFCs have been left out as they generally borrow through term loans and not through loans. bonds,” he said.

Most small and medium-sized NBFCs, Agarwal said, did not need cash to repay their debts, but needed funds to on-lend them. The program, which only provided funds for 90 days, did not help them solve the problem of funding for loans.

A three-month funding program was a no-start as NBFC and HFCs sought longer-term funding as Covid-19 uncertainty had not receded, said Jinay Gala, senior analyst at India Ratings and Research. . Short-term money supply would also show that desperation would send mixed signals about the lender’s health, Gala said.

“No one would want additional ALM (asset-liability management) risk by adding debt to pay off existing debt. NBFC may have benefited from the program because their liquidity has decreased, which means repaying after 90 days would not be difficult for them,” Gala said.

Financing costs

For those who managed to tap into the facility, the cost of funds was around 30 to 50 basis points lower than prevailing market rates, a debt market banker said on condition of anonymity.

While ‘AA’ and ‘A’ rated entities have raised funds from the program at yields of between 7.15% and 9% on their debt securities, entities rated ‘BBB’ and below have raised funds at yields between 9% and 11%, according to data from National Securities Depository Ltd. NSDL data is available for non-convertible debentures, but not for commercial paper.

Since the RBI provided funding at the repo rate of 4%, the trust earned a spread of 315 to 700 basis points beyond the securities it issued to the RBI for funding, officials said. debt market bankers that BloombergQuint spoke to.

SBI Capital Markets declined to comment. Responses to RBI questions sent on Wednesday are awaited.

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Banks are doing all they can to attract auto buyers during the holiday season https://artwiredmedia.com/banks-are-doing-all-they-can-to-attract-auto-buyers-during-the-holiday-season/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/banks-are-doing-all-they-can-to-attract-auto-buyers-during-the-holiday-season/

The holiday season will not be the same this year. Covid-19 infections are still high. Mobility is restricted. Many consumers are grappling with the loss of jobs and income.

Against this backdrop, lenders are going the extra mile to make home and auto loans attractive. The central bank’s recent regulatory easing, aimed at stimulating consumer demand during the holiday season, has also helped.

Wednesday, National Bank of India announced that its home loan customers will get an interest rate concession up to 20 basis points based on their credit score for properties costing Rs 75 lakh and above. Those applying through the bank’s digital banking app and female borrowers will be eligible for an additional discount of 5 basis points each.

This brings SBI home loan rates to their lowest in years, with a subset of borrowers able to take funds at less than 7%. Bank of Barodaalso, offers 7% as its lowest rate with a concession for balance transfers, while peers National Bank of Punjab offers a slightly higher rate than that.

Private banks match some of these offers, going through listings on Paisabazaar.com. HDFC Ltd. offers festive season rates starting at 6.9%, the aggregator’s website says.

“We expect this holiday season to be a very crucial time for improving demand for home loans as consumers buy new homes and increase residential construction activity across the country,” said HT Solanki, head of mortgages and other retail assets at Bank of Baroda Solanki expects potential customers to be incentivized to transfer existing home loans to the bank due to competitive pricing and waiving of processing fees.

CS Setty, managing director of SBI, also hopes that the take-up of home loans will improve. “As people spend more time indoors, they prefer owning a house and a bigger one at that,” he said. Setty’s optimism is based on a combination of factors, ranging from improved home affordability in some markets, special offers from builders, concessions from state governments and, most importantly, a push from lenders.

Some of the home loan offers come at the right time but would have happened anyway after central bank announcements earlier this month, said Ratan Chaudhary, head of home loans at Paisabazaar. On October 9, Governor Shaktikanta Das announced that the RBI had rationalized risk weightings linking them only to loan-to-value ratios of new home loans sanctioned through March 31, 2022.

Home loan applications in Paisabazaar are already higher by around 10-12% for affordable homes below Rs 30 lakh. In the more expensive segments, inquiries are around 95% of pre-pandemic levels.

“With the cheapest home loans they have been in over a decade, existing customers will also switch to cheaper home loan rates. In fact, most banks are now focusing on home loan buyouts,” Chaudhary said.

While other banks are expected to follow SBI announcements to discount interest rates based on loan value, some such as HDFC Bank Ltd. and ICICI Bank Ltd. also offer a concession of around 0.5% for blue-chip property developer projects. Even other smaller non-banks, though unable to compete on interest rates, are waiving processing fees and extending other benefits, Chaudhary said.

In some cases, developers partner with lenders and offer concessions on their end. For example, Tata Housing has announced a program that allows customers to pay a fixed interest rate of 3.99% for a period of one year, with the rest borne by the company. Customers are looking for perks that lower their down payment and are also looking for festive deals with big discounts, said Sanjay Dutt, managing director and chief executive of Tata Realty & Infrastructure Ltd., quoted in a statement on the program.

Are banks just as aggressive on car loans?

A similar story is also playing out for car loans.

The State Bank of India and the Bank of Baroda are both offering a holiday season concession of up to 25 basis points on car loans. A press release from Axis Bank Ltd. claims 100% down the road financing for auto loans. The Federal Bank is offering to finance 95% of car loans from Hyundai Motor India Pvt. ltd. and Maruti Suzuki India Ltd.

Dealers, however, report contradictory trends. Banks, which previously financed 80-85% of the road price of the vehicle, now only finance 65%-70%, BloombergQuint reported last month.

Many lenders have announced car loan interest rate concessions over the holiday season to grab a bigger share of the market, Chaudhary said. Processing fees have also been waived, as often happens in these months.

Setty said customers, still wary of the pandemic, now prefer their own cars. Demand is picking up and is unlikely to be transitory. The recovery seen in July and August was likely due to pent-up demand, he said. Sales in September and October continue to show improvement, he added.

Vyomesh Kapasi, managing director of Kotak Mahindra Prime Ltd., agreed. In the new normal, the goal of buying a car to keep your family safe is also very important, Kapasi said. Thus, auto loans are experiencing a strong rebound.

The optimism is not yet reflected in the data.

Bank credit rose 6.02% in August 2020, the lowest since August 2016. Housing loans rose 11.1% in the same month, compared to 16.6% last year. But auto loans rose 8.4% from 3.7% in the same period last year.

Will lender efforts help accelerate credit growth? “Absoutely!” Setty said. “We’re already seeing greater traction across all sectors and a general improvement in picking,” he said.

Pent-up demand due to lockdowns as well as advertised deals may push sales to pre-covid levels, said Mayank Kachhwaha, co-founder and COO at IndiaLends. While home loan applications continue to approach pre-covid levels, applications for other personal loans are still around 60-65%, Kachhwaha said. These will likely take longer to recover, he said.

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Update on financial situation and process with lenders https://artwiredmedia.com/update-on-financial-situation-and-process-with-lenders/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/update-on-financial-situation-and-process-with-lenders/

Prosafe refers to information about its financial situation and process with lenders that has been provided over time, latest on 1st October 2020.

Discussions with the company’s creditors are continuing and the objective remains to agree on a lasting financial solution on a consensual and profitable basis as soon as possible. It’s still unclear what a final solution might look like, but as previously stated, significant debt ownership is expected, which will likely result in minimal or no recovery for current shareholders.

Pending the conclusion of discussions with creditors, the company continues to operate as usual to protect and create value in difficult market conditions.

On this basis, the Company will continue to defer payment of scheduled installments and interest under both bank facilities. Similarly, payment of the final installment due and payable under the seller credit to Cosco for the Safe Notos remains as originally announced on February 13, 2020 subject to ongoing discussions with Cosco and the lenders.

Further information will be provided in due course.

Prosafe is a leading owner and operator of semi-submersible accommodation vessels. The company is listed on the Oslo Stock Exchange under the code PRS. For more information, please see https://www.prosafe.com

Stavanger, January 5, 2021
Prosafe SE

For more information, please contact:

Jesper K. Andresen, CEO
Telephone: +47 51 65 24 30 / +47 907 65 155

Stig Harry Christiansen, Deputy Managing Director and Chief Financial Officer
Telephone: +47 51 64 25 17 / +47 478 07 813

This information is subject to the disclosure requirements in accordance with section 5-12 of the Norwegian Securities Act.

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Thyssenkrupp is a litmus test of German green resolution, Energy News, ET EnergyWorld https://artwiredmedia.com/thyssenkrupp-is-a-litmus-test-of-german-green-resolution-energy-news-et-energyworld/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/thyssenkrupp-is-a-litmus-test-of-german-green-resolution-energy-news-et-energyworld/ By Ed Cropley

LONDON: ThyssenkruppThe steel activity of is a double shock. In addition to having recorded an operating loss of 946 million euros last year, it also represents almost 3% of the Germanyit’s carbon dioxide emissions. Making it a green and profitable producer would therefore kill two big birds. Managing director Martina Merz’s search for a large enough stone will be a litmus test for Berlin’s green resolve.

Germany has 130 billion euros to deploy for a low-carbon recovery, but Thyssenkrupp isn’t exactly a healthy patient. The conglomerate’s latest results, released on Thursday, show how the coronavirus hammered demand from automakers. Next year will probably only be slightly less terrible. The costs of greening its steel arm, meanwhile, are daunting.

First, Merz is to transform Thyssenkrupp’s traditional blast furnaces, which use coal to transform iron-ore iron and carbon dioxide, in electric arc furnaces that use hydrogen do most of the chemical work. Fortunately for the planet, the main by-product is water. But the change would cost 600 million euros per million tonnes of capacity, estimates an analyst. For Thyssenkrupp, which makes around 12 million tonnes of steel a year, that means around 7 billion euros up front, or 2 billion euros more than Merz’s net cash.

A bigger challenge is power. Hydrogen is only truly green if it’s made using electricity to split water through electrolysis, but that requires renewable energy. McKinsey estimates that each million tonnes of “green” steel produced in this way consumes 4.4 terawatt hours of electricity, or by extension 53 terawatt hours for Thyssenkrupp. Putting that into perspective, that’s the equivalent of running the entire UK wind farm of 24 gigawatts flat for three months.

This is a daunting challenge, but not necessarily insurmountable. Germany’s climate bonds mean it has to do something about steel emissions. And Berlin is already spending 9 billion euros on hydrogen research and development as part of its coronavirus recovery. As technology improves and economies of scale take hold, prices will fall. McKinsey thinks “green” hydrogen could be cheaper than its methane-produced rival by 2030.

Companies like Volkswagen and BMW would probably still need encouragement to buy green steel. And Germany should lean on its trading partners to level the playing field by imposing a tax on carbon-intensive imports. But none of this is impossible, and it’s better than letting old stagers like Thyssenkrupp rot.

(The author is a Breakingviews columnist. The opinions expressed are his own.)

BACKGROUND NEWS

– Thyssenkrupp announced on November 19 an operating loss of 1.6 billion euros for the 2019-2020 financial year, the coronavirus having hammered demand from the automotive industry, its biggest customer.

– The struggling German conglomerate announced 5,000 more layoffs as sales for the 12 months to the end of September fell 15% to 28.9 billion euros.

– The company’s steel division suffered an operating loss of 946 million euros over the period. Thyssenkrupp said it was considering “various competing options” to transform the unit from a major carbon dioxide emitter into a “green steel” producer. A final decision will come in the spring, he added.

– Following the sale of its elevator division for 17.2 billion euros in February, Thyssenkrupp reported net financial assets of 5.1 billion euros, compared to net debt of 3.7 billion euros the last year. Available liquidity stands at 13.2 billion euros, he added.

– Thyssenkrupp shares were down 5.6% at 4.63 euros at 08:10 GMT on November 19.

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Mastering Acid Reflux – The New Indian Express https://artwiredmedia.com/mastering-acid-reflux-the-new-indian-express/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/mastering-acid-reflux-the-new-indian-express/

Express press service

BENGALURU: Have you ever felt a burning sensation and slight hiccups after eating a spicy meal? Acid reflux, a lifestyle disease also known as heartburn, is associated with chronic heartburn symptoms, particularly in the lower chest area, and is primarily caused by an excessive dose of ‘spices. According to medical science, when food goes back into the food pipe from the stomach, the lining of the esophagus (food pipe) gets irritated due to acid reflux, which leads to indigestion. The condition is uncomfortable regardless of age group.

Due to the rapid change in lifestyle and eating habits, there has been a sharp increase in the number of people suffering from acid reflux. It is usually triggered by spicy, fatty, or acidic foods like alcohol, caffeine, high intake of carbonated drinks, acidic juices, and table salt. Normally, people tend to ignore the symptoms and self-medicate with an antacid to recover from the burning sensation, without any consultation with a doctor. If done, it can have serious health and life-threatening consequences, and one of the main risks is esophageal cancer. Seeing a doctor in time can help avoid such conditions and relieve symptoms. If prolonged, acid reflux can lead to a number of health complications. Here is some:

GERD
Gastroesophageal reflux disease (GERD) is diagnosed when acid reflux occurs more than twice a week. Some of the common symptoms include bad breath, nausea, excessive chest pain, difficulty swallowing (dysphagia), etc. GERD is not life-threatening, but if left untreated, it can cause serious health problems like esophageal ulcers, esophagitis, and aspiration pneumonia.

Caries
Heartburn can also affect our smile. Stomach acid affects the enamel or the back of the tooth, which can weaken our tooth and lead to cavities. A regular oral test is recommended to detect early symptoms of a serious dental problem.

Hernia
Acid reflux also gives rise to hernia. Usually, hiatal hernia does not show possible symptoms until the protrusion of the stomach, through the hiatus, is quite large. Possible symptoms include fatigue, abdominal pain, sore throat, frequent burping, etc.

Esophageal cancer
People with frequent indigestion problems have a chance of getting esophageal cancer. This condition does not show symptoms at an early stage, and symptoms are not noticeable until the cancer has reached a more advanced stage. It causes severe weight loss, coughing, severe indigestion and heartburn. (The author is a doctor at Apollo Spectra, Koramangala, Bangalore)

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India approves special purpose vehicle to help shadow lenders raise capital https://artwiredmedia.com/india-approves-special-purpose-vehicle-to-help-shadow-lenders-raise-capital/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/india-approves-special-purpose-vehicle-to-help-shadow-lenders-raise-capital/

India has approved the establishment of a new entity to provide liquidity to non-bank financial companies under the government’s fully guaranteed support to help struggling shadow lenders.

The special purpose entity will issue securities, guaranteed by the Indian government, in accordance with the plan approved by the Cabinet of the Union. The Reserve Bank of India will buy this paper and an SPV Stressed Asset Fund will invest the proceeds in NBFC short-term debt.

While the government will inject Rs 5 crore equity into the SPV, its liability will amount to a default by a non-bank or mortgage lender raising funds through the special purpose vehicle. The guarantee is, however, capped at Rs 30,000 crore under the measure announced by Finance Minister Nirmala Sitharaman as part of the Covid-19 relief plan.

The measure would help NBFCs obtain a higher or higher quality rating for bonds issued, according to a government statement.

What’s in the scheme

  • A large public sector bank would create the SPV to manage a stressed asset fund, which would issue special interest-bearing securities.
  • Securities to be issued as needed, subject to a cap of Rs 30,000 crore on total outstanding.
  • The securities would be purchased by RBI and the proceeds would be used by the SPV to acquire the investment grade debt of up to three months in duration from eligible NBFCs..

The scheme is a step initiated by the RBI to inject liquidity into NBFCs, a senior government official told BloombergQuint on condition of anonymity. The central bank will buy the securities issued by the SPV as the law does not allow the RBI to directly inject money or liquidity into such entities, the official said.

Modified partial guarantee plan

The government also approved the extension of the partial credit guarantee Scheme with changes to make NBFCs more eligible.

  • Scheme extended from June 30, 2020 to March 31, 2021 for the purchase of pooled assets.
  • NBFCs or mortgage lenders declared in the SMA-1 category for technical reasons only for one year before August 1, 2018 will now be eligible.
  • The net profit criterion has been relaxed to include non-bank lenders that have declared a profit in at least one of the last three financial years.
  • Loan pools created six months prior to rating may be eligible under the program. Earlier, asset created before March 2019 qualified.
  • The scheme would now cover the purchase of bonds and commercial paper rated ‘AA’ and lower, compared to the only assets previously pooled.
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Why Don’t Struggling Small Businesses Take More PPPs? https://artwiredmedia.com/why-dont-struggling-small-businesses-take-more-ppps/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/why-dont-struggling-small-businesses-take-more-ppps/ Opinions expressed by Contractor the contributors are theirs.

Millions of businesses across the country are struggling, but many are not taking the latest version of government assistance: a second round of Paycheck Protection Program (PPP) loans. This is not happening because companies are doing better than they were last year; it is because the PPP still contains structural blockages that prevent companies from obtaining the aid they urgently need.


Westend61 | Getty Images

A recent investigation by the Federal Reserve Bank revealed that 30% of American small businesses – totaling 9 million – fear they will not survive 2021 without more government assistance. And yet, many do not ask for help. the Small Business Administration (SBA) reports that seven weeks after the start of the second round of the PPP, almost half of the funds remain and only 31% of 2020 PPP loans have been canceled to date.

New data sheds light on barriers to PPPs

Enthusiasm, which has more than 100,000 small business customers in the United States, recently conducted a study analyzing the decisions of business owners. The data revealed two big barriers to accessing aid: the 25% revenue reduction requirement and the slow forgiveness of loans for the first round of PPPs, especially for business owners. of color.

Recent structural updates to PPP have made it more accessible to smaller businesses and those previously excluded. But two remaining changes are needed to ensure that the remaining dollars — about 64% of the $284 billion available in this round of funding — are fairly distributed. Congress, working with the SBA, must quickly address these issues to fulfill the PPP’s promise to help businesses that need it most.

Related: Was there $1 billion in PPP fraud?

Revenue reduction requirements fail to account for rising business costs

To be eligible for the new PPP round, companies must show that their revenue fell by 25% or more in 2020, comparing gross revenue in any quarter to the same quarter in 2019. This “25% rule” has been implemented to ensure that funds only go to businesses that have been hardest hit and need pandemic support the most.

Despite the good intentions of policymakers, the revenue reduction rule prevents many businesses from getting the crucial help they need to keep operating. It does not take into account the additional costs of running a business during Covid-19. Small businesses have installed protective barriers and provided employees with PPE, obtained permits to operate outdoors, and purchased equipment like heat lamps and tents to welcome customers outside in cold weather. Many business owners are also being forced to spend significantly more capital to make necessary changes to their supply chains and deliver vital employee benefits.

In 2019, Brett Robison and Christian Layke opened Silver Branch Brewery in Silver Spring, Maryland. Just weeks after their first birthday, Covid-19 forced them to close their bar. Using PPP and EIDL loans, they quickly invested to focus on sales and self-distribution of canned beer in stores and developed delivery and e-commerce to maintain as much of the beer trade as possible. detail. However, since canned beer costs more than serving it from the tap, they continued to operate in the red despite the increase in overall sales. Their situation has been exacerbated by rising aluminum costs for enclosures, which have increased by more than 25% due to supply restrictions. They reportedly applied for a second PPP loan to avoid furloughing staff for the duration of the winter, but they do not meet the revenue reduction threshold.

Related: How to get an SBA Coronavirus PPP loan and get it forgiven

Data from Gusto found that the revenue reduction requirement prevented 44% of small businesses from applying for a second-draw PPP, including 42% of businesses in particularly hard-hit industries like retail, food and beverage, tourism, arts and entertainment.

Congress needs to modify this eligibility requirement to recognize the higher operating costs and new expenses brought about by the pandemic. Eligibility should be determined by changes in net income rather than gross income. For example, if a business has experienced a 15% drop in revenue and a 10% increase in operating expenses, it should be eligible for support.

Loan forgiveness is a major hurdle, especially for small business owners of color

Many businesses that received loans in the first round of PPPs have not forgiven them, making banks and business owners reluctant to apply for second-round loans.

Gusto’s study found that 56% of small businesses have yet to receive loan forgiveness for first-round PPP loans. Nearly one in four business owners who did not apply for the second round have huge concerns about loan forgiveness. One of the main reasons cited by small businesses for not applying for a second draw PPP is that they have not yet received a forgiveness on the first PPP loan and are worried that they will not receive a forgiveness for a second loan. Reimbursing the two loans would be a significant difficulty for most of these businesses, if not an impossibility for many.

The wide variations in forgiveness rates by race and ethnicity are likely to result in a much worse outcome for business owners of color on second-draw PPP loans. Fifty-six percent of white business owners have not had their PPP loan forgiven, compared to 75% of black or African American business owners, 63% of Asian or Pacific Islander business owners, and 54% Hispanic or Latino business owners.

Dan Luthi, Chief Operating Officer at Ignite Spot Accounting, works with many small business owners who are reluctant to apply for a second loan before their first is canceled. The accounting firm’s clients need immediate help, but are hesitant to take out new PPP loans due to low loan forgiveness levels for the first round of PPPs and because of the many ambiguous changes in eligibility rules.

To mitigate this problem, financial institutions must prioritize loan cancellation in addition to processing new PPP loan applications, but banks are financially incentivized to make new loans rather than cancel existing loans. Some banks are also hesitant to lend to business owners who did not receive a first-round PPP pardon.

Congress must act quickly to create new incentives for banks and lenders to approve loan forgiveness and push lenders to approve requests for forgiveness within the next six weeks. Additionally, loan forgiveness needs to be expedited for business owners of color. These steps will make it clear to business owners and lenders that they can trust the forgiveness process and they won’t foot the bill.

Small businesses deserve a quick removal of these barriers

American small business owners – and the almost 59 million the people they employ need continued economic support while the country waits for widespread vaccination. While the accessibility of PPP finance has improved since the first round in 2020, barriers and inequities remain. It is critical that Congress and the SBA change the revenue reduction requirement and prioritize loan forgiveness. These changes will go a long way to help small businesses that need it most and ensure equal access to PPP support.

Related: 5 Strategies to Avoid PPP Legal Mistakes

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Chapter 19 of HUD’s New MAP Guide – First Takeaways for Lenders and Borrowers https://artwiredmedia.com/chapter-19-of-huds-new-map-guide-first-takeaways-for-lenders-and-borrowers/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/chapter-19-of-huds-new-map-guide-first-takeaways-for-lenders-and-borrowers/

For those of us in the HUD-assured multifamily financial space who make a living trying to reduce the time between firm commitment and closing, Chapter 19 of the new Multifamily Accelerated Processing Guide (MAP) was a read. must-have when released in late 2020. A revamped version of what was once a stand-alone closing guide, Chapter 19 will be the bible for FHA-insured multifamily closings for the foreseeable future, providing essential instructions on how to way to navigate the sometimes labyrinthine closing process of the HUD. The new MAP guidance applies to transactions for which firm commitment requests are submitted on or after March 18, 2021. Here are some early takeaways from Chapter 19:

Chapter 19 Reinforce Closing Protocols

For many years, HUD has heard a common refrain from lenders and borrowers who participate in agency lending programs: “We want more consistency from one HUD office to the next.” Chapter 19 responds to this refrain by strictly prescribing the sequence of events leading up to the closing table, so that parties making deals in San Francisco, Boston, and everywhere in between have more or less the same experience. The document is filled with deadlines such as the following:

  • “To maintain a tentative closing date, the lender or lender’s attorney must submit a draft closing brief to the closing coordinator at least 30 business days prior to any tentative closing date.”
  • “HUD’s closing attorney will contact the lender’s attorney within two business days of the closing coordinator’s approval to begin the review.”
  • “The lender’s attorney must submit all remaining documents not yet reviewed or approved by HUD, at least four business days prior to the confirmed closing date for mail-in closings.”

Of course, consistency will not be achieved by publishing Chapter 19 alone, but rather through the satellite and regional multifamily offices faithfully implementing the printed word. HUD employees will likely strive to adhere to the new protocols as much as possible, at least initially. Program participants who don’t follow the new rules of the road can expect a slow and bumpy ride until closing time.

Tentative closing dates should help move deals forward

When submitting early drafts of closing documents to HUD, the lender’s attorney often advises the department that the parties are aiming to close on a certain date. Under the old closing guide, HUD was not required to recognize this target date, let alone strive to accommodate it. In contrast, Section 19.1.2.3.B.2 of Chapter 19 provides the following: “If the Lender requests a preferred closing date…the OGC and the RC Director will review the information provided and mutually agree on a date. provisional closure.” The advent of the Provisional Closing Date, which is set shortly after the release of the Firm Commitment, is significant in that it puts all parties (including HUD) on the same page regarding the speed at which the deal must unfold. And while the tentative closing date is not a guaranteed date, it should be helpful in managing the expectations of the parties (especially those of the borrower, who typically has less experience with HUD closings than the lender).

HUD’s willingness to sign quid pro quo regulatory agreements will be beneficial when the schedule is tight

When talking to borrowers, their attorneys, title agents, and others who are only interested in FHA-insured multifamily financing, lender attorneys like to talk about the “long track” needed to enter into HUD agreements. Part of this long trail is to circulate the regulatory agreement from the borrower to the lender’s attorney at HUD and finally to the title agent who handles the registration. Recognizing that the regulatory agreement “signature circuit” is time-consuming and vulnerable to transportation incidents, Chapter 19 provides the following in Section 19.1.3.4:

“HUD will sign original recordable closing documents in consideration where permitted by state and local law. If a recordable document is not signed in consideration, the lender’s attorney must first obtain the non-HUD signatures and then submit the original to the RC Director for HUD signature. HUD may authorize the designated receiver (e.g., title agent) to hold HUD-signed documents in escrow.”

This provision allows the borrower and HUD to simultaneously sign each other’s signature pages and send them to the title agent, where the pages can be combined to create a fully signed regulatory agreement. When the schedule is tight and delaying closing for even a single day can cost the borrower thousands of dollars in extension fees, using counterparty signatures could end up being a godsend.

The main caveat is that the signature of a counterpart must be “permitted by national and local law”. The lender’s attorney will be well advised to ask the borrower’s attorney to confirm early on that the consideration option is on the table. If national or local law prohibits this practice, the parties should adhere to the circuit of the pre-Chapter 19 regulatory agreement and establish their time limits accordingly.

The relaxation of search and investigation deadlines is a positive development

We at Dinsmore were pleased to see that Chapter 19 grant program participants have increased flexibility regarding the age of certain closing deliverables. For example, under the old Closing Guide, ordering UCC searches, which had to be dated within 30 days of closing, was always a bit of a gamble. If you ordered too early, searches could end up not being dated within 30 days of closing. If you ordered too late, you may not have done the research when all the other parts of the HUD add-on package were ready to go. Section 19.4.13.5 of Chapter 19 provides that UCC searches must be dated within 60 days of closing, which will allow parties to order their searches earlier in the document review process with less worry about knowing if they will be too old at the time of closing. is planned.

Similarly, with respect to surveys, the old fence guide stated that the surveyor’s field work must take place within 120 days of closing. Under Chapter 19, Section 19.4.7.6.A.2, this fieldwork must now take place within 180 days of closure. This extra leeway should make survey dates non-issue for most closeouts, giving program participants additional bandwidth to focus on other aspects of the deal.

Will the five-day rule lead to more piecemeal submissions to HUD?

Section 19.1.2.4.I.1 of Chapter 19 provides the following: “To maintain a tentative closing date, the Lender and Lender’s attorney must respond to HUD’s comments within five business days of the date of distribution. comments.” For the lender’s attorney who has done adequate quality control before submitting the draft closing brief, it should be manageable to respond to HUD’s minimal comments within that time frame. In these cases, it will be helpful for the parties to feel the pressure of the five-day rule as a way to keep the deal on track.

However, depending on the complexity of the transaction and the degree of coordination required with third parties (surveyors, title agents, general contractors, etc.), it is not difficult to imagine scenarios where the consolidation of documents meeting to all HUD comments within five business days of receiving them is not possible. Will the lender’s attorney be inclined to make additional submissions that are only 75% complete, just to meet the five-day window and retain their tentative closing date? Or will they choose to gather 100% responsive material before sending the email to HUD, even if it means missing the five-day window?

As a former HUD Chief Counsel who regularly reviewed supplemental packages, I know that these 75% complete packages result in very inefficient processing. Will an increased occurrence of piecemeal supplemental packages be an unintended by-product of the five-day rule, making the HUD review process less efficient and increasing the interval between commit and close, unlike the intent of the rule? Time will tell us.

The essential

All in all, there’s a lot to like about Chapter 19 of the new MAP guide. The authors have clearly appreciated public feedback on the need to add speed and consistency to the closing process and have implemented changes to this process that should have tangible results. But only parties who carefully study the new rules will reap the benefits and avoid the pitfalls.

Think of it this way: If you’ve been driving a sedan for years and suddenly get behind the wheel of a sports car without reading the owner’s manual, you shouldn’t be surprised if you end up in a ditch.

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Lenders’ argument violates US slavery ban – The Athletic https://artwiredmedia.com/lenders-argument-violates-us-slavery-ban-the-athletic/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/lenders-argument-violates-us-slavery-ban-the-athletic/

San Jose Sharks winger Evander Kane accused his creditors of seeking to violate the 13th Amendment to the US Constitution’s prohibition against involuntary servitude in their effort to convert his bankruptcy case to one that would allow them to garnish his wages for years to come.

by Kane Chapter 7 bankruptcy petitionwhich lists $26.8 million in debt, has been heavily loaded since its inception, preceded by lawsuits against creditors and gambling losses. and misleading who ‘misrepresents facts and obscures the truth,’ the winger alleged in a lengthy court filing on Thursday night.

Five lenders, including Zions Bancorp., seek to convert the case under the bankruptcy code from Chapter 7, which would only require Kane to pay creditors using current assets, to Chapter 11, which would place the remaining years of his contract with the Sharks under their control.

“Zions makes it clear in its motion that the only reason it is seeking Chapter 11 conversion and the appointment of a Chapter 11 trustee is to ensure that Kane’s future earnings belong to the bankruptcy estate, regardless of whatever period of years the Chapter 11 trustee and creditors deem appropriate for a bankruptcy plan,” Kane’s motion said. “It violates the Thirteenth Amendment’s prohibition against involuntary servitude and cannot be tolerated by the Court… The Thirteenth Amendment ended involuntary servitude unless convicted of a crime.

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UK unemployment rate falls as workers leave the labor force https://artwiredmedia.com/uk-unemployment-rate-falls-as-workers-leave-the-labor-force/ Tue, 23 Mar 2021 04:47:43 +0000 https://artwiredmedia.com/uk-unemployment-rate-falls-as-workers-leave-the-labor-force/

(Fixes drop in number of foreign workers in paragraph 13 to 178,000, not 550,000)

By David Milliken and Andy Bruce

LONDON (Reuters) – Britain’s unemployment rate fell unexpectedly in the three months to January, a change that partly reflects the abandonment of job search as lockdown measures tightened at the start of the year, official figures showed on Tuesday.

The core unemployment rate fell to 5.0% in the three months to January, from 5.1% in the last quarter of 2020, contrary to a Reuters poll forecast for a slight rise to 5.2%. None of the economists interviewed expected a fall.

“The latest labor market data is somewhat mixed but shows considerable resilience overall,” said Howard Archer, chief UK economist at consultants EY ITEM Club.

Part of the drop in the overall unemployment rate was due to the high number of unemployed in October alone, which dropped the quarterly figures.

The decline also reflects an increase in the proportion of the potential labor force classified as inactive, such as students, parents caring for their children full-time and people who have temporarily given up looking for work.

This “inactivity rate” has increased by 0.3 percentage points over the past three months to 21.0%, its highest since the start of 2019, while the share of people in employment has fallen by 0.3. percentage point over the same period, a decrease of 147,000.

Since January, non-essential shops and most businesses open to the public have been closed in England to slow a rise in more infectious variants of COVID, with similar measures in other parts of the UK.

Last month the government extended furlough support – which currently pays the wages of one in five employees – until the end of September. Without furlough, Britain’s unemployment rate would be much higher.

A rapid rollout of vaccinations has sharply reduced new infections and allowed English pupils to return to school this month. Shops are due to reopen next month, but restrictions on hospitality will remain until at least the end of June.

Separate official data based on tax records – which some analysts say is more reliable than the main labor force survey – showed the number of employees on companies’ payrolls in February fell by 693,000. over the past year.

Almost two-thirds of that decline affected workers aged under 25, the majority of job losses were in the hospitality industry and a third of the total took place in London, the ONS said.

But there has been a recovery more recently with an increase of 68,000 between January and February in the number of workers.

This data also indicates a drop of 178,000 in the number of non-UK nationals employed by UK companies in the last quarter of 2020 compared to the previous year.

Previous ONS data from the main labor force survey showed a drop of around 800,000 or more, although the ONS said this should be interpreted with caution.

“The LFS estimates alone may significantly overstate the decline in the number of non-UK nationals,” the ONS said.

(This story corrects drop of foreign workers in paragraph 13 to 178,000, not 550,000)

(Edited by Edmund Blair)

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