December 17, 2014 Alert - A Message From the Executive Director Regarding Recent Asset Backed Alert

Dear friends and industry colleagues,

I am writing today with regards to a recently published erroneous media article from Asset Backed Alert entitled “‘Deal-Monitor’ Role On the Table for MBS”. This story states that SFIG is “on the verge of finalizing an effort to add oversight to mortgage-bond transactions” by calling for “the hiring of a service provider to oversee the receivables backing each new transaction in the asset class.” Furthermore, the article states that RMBS 3.0 has been “negotiating the role for about a year,” and that “a compromise will come in early 2015.”

Unfortunately, this is simply not true. At best it is an obvious misunderstanding of the RMBS 3.0 initiative and misleading portrayal of public statements. Given the importance of the ongoing RMBS 3.0 initiative, which is centered on fostering industry discussion of critical issues, we wanted to be sure you heard directly from us and that we set the record straight.

Had we been contacted about the story in advance we would have made this clear to the publication. What is true – and we have stated as such publicly as recently as the November 12, 2014 SFIG/IMN Private Label Securities RMBS Reform Symposium – is that we will be discussing the concept of the role of a potential transaction party to serve in a “deal agent” or monitoring capacity within the applicable RMBS 3.0 work streams.

The RMBS 3.0 initiative is about an industry working together to recognize challenges and collectively work together to solve them. Through this effort, SFIG has published two iterations of its Green Papers that are explicitly designed to stimulate further debate and discussion. We expect to continue to spur conversation with further Green Papers. It should be clear then that any insinuation that SFIG is in any way moving toward decisions on this initiative without proper treatment through the work streams according to rules of engagement and governance are simply not aware of the facts. 

SFIG certainly wants to encourage a healthy debate amongst our members and industry peers to determine concrete recommendations in RMBS 3.0. We are still working diligently to evaluate industry concerns and suggestions to create an educated recommendation for the industry.

We look forward to keeping this discussion alive and will be sure to alert you all once the next edition of the Green Paper is ready for review.

Sincerely,

Richard A. Johns

  Richard Johns
  SFIG Executive Director

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