Bipartisan Lawmakers Urge SEC to Allow Full mREIT Participation in GSE Risk Sharing Transactions

Yesterday, a bipartisan coalition of 13 members of Congress sent a letter to Securities and Exchange Commission (“SEC”) Chair Mary Jo White asking to begin a dialogue about addressing the regulatory hurdles that hamper mortgage real-estate investment trusts (“mREITs”) from fully participating in the government-sponsored enterprise (“GSE”) credit risk transfer transactions.   The letter expands upon an agreement between Congressman Edward Royce (R-CA) and SEC Chair White, who testified before the House Financial Services Committee and agreed to work with Congressman Royce to increase mREIT participation in credit risk sharing transactions.

“Like the Federal Housing Finance Agency (“FHFA”), we see significant value in exploring the opportunities to introduce different kinds of investors to participate in this sector to further test the long-term viability of this [credit risk transfer] model in different credit environments…We would like to work with you, the Commission, and the FHFA on identifying ways to overcome the barriers to mortgage REIT participation,” stated the letter.

“SFIG appreciates the bipartisan Congressional effort to work with the SEC and FHFA to create a responsible disclosure package to allow for full mREIT participation in Agency credit risk sharing transactions.  Such an outcome will be positive for both the U.S. taxpayer and for the flow of capital in the housing finance sector,” stated Richard Johns, SFIG’s Executive Director.

Please contact Michael.Flood@sfindustry.org to learn more about SFIG’s Congressional outreach efforts.

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