January 13, 2016 Newsletter
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January 13, 2016

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


Momentum continues to build for ABS Vegas 2016, taking place February 28 - March 2, at the Aria Resort & Casino in Las Vegas. With more than 140 corporate sponsors and over 3,000 registrants, including 1,350+ issuers & investors, the 2016 program is shaping up to be the largest gathering yet!

View Confirmed Issuers & Investors

The three-and-a-half day program has been developed by leaders within the structured finance industry representing the full spectrum of industry participants including investors, issuers, financial intermediaries, regulators, law firms, accounting firms, technology firms, rating agencies, servicers and trustees.

View Full Agenda

SFIG members receive special discounted rates off registration and sponsorship

Reserve your place today!

For sponsorship information, please contact Christopher Keeping
at +1 212.901.0533 or ckeeping@imn.org


SFIG’s Women in Securitization (“WiS”) initiative is gearing up once again to welcome hundreds of industry women to ABS Vegas. This year’s event, Winning Outside the Workplace, will give WiS members the opportunity to level the playing field outside of the board room with educational insight on wine pairings, gaming, and social engagement.

Registration for the event will open for WiS members on Wednesday, January 20, 2016. If you are not a member of WiS and are interested in joining this important initiative, sign-up today.

SFIG is also accepting sponsorship contributions to help support the ABS Vegas event and WiS activities throughout 2016.

To maximize the benefits WiS is able to provide to the structured finance industry, we count on financial support from our corporate members in order to provide the highest quality programming and events. SFIG will support WiS with a 50 percent match of our member sponsorship target.

WiS offers several tiers for corporate institutions and individuals to determine how they can best support and sponsor activities and programming in 2016. WiS also provides the opportunity for individuals to support this important initiative, while receiving recognition and special benefits for their financial contribution. A full review of the benefits available at each level of sponsorship is available here.

To take advantage of all of the benefits available to our sponsors and be included in ABS Vegas materials, submit your WiS sponsorship form by February 5th. 

Your participation and support is vital to continuing efforts to support the retention and promotion of women in the structured finance industry and we look forward to recognizing our generous sponsors at ABS Vegas. To support WiS today, please complete the sponsorship form and email it to sponsorship@sfindustry.org.



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.


Yesterday, SFIG’s Executive Director, Richard Johns, met with Congressman Scott Garrett (R-NJ) to discuss ABS bond liquidity. The discussion focused on European regulatory efforts to implement "High-Quality Securitization" standards that would grant qualifying ABS products on bank balance sheets capital and potential liquidity relief, and the Basel Committee’s pending release of a final consultative document regarding the Fundamental Review of the Trading Book (“FRTB”).

SFIG will continue to present its members’ views and insights to Congress on matters affecting ABS bond liquidity. To view SFIG’s letter to the regulators on FRTB, please click here. To learn more about SFIG’s advocacy efforts, please contact Michael.Flood@sfindustry.org. To learn more about our High Quality Securitization Task Force contact Alyssa.Acevedo@sfindustry.org


Yesterday, January 12th, SFIG submitted a comment letter, drafted by Morgan Lewis, to the U.S. Securities and Exchange Commission (“SEC”) regarding asset-level information for additional asset classes, specifically credit card and equipment floorplan, to address one of the deferred actions within the Regulation AB II final rule. This letter follows our June 2015 submission to the SEC.

Future discussions across the asset class committees and the Regulation AB II Task Force will focus on the remaining outstanding proposed rules, including requiring issuers to provide the same disclosure for Rule 144A offerings as required for registered offerings. If you would like to participate in these discussions, please contact Alyssa.Acevedo@sfindustry.org.


Last Friday, SFIG staff met with the U.S. Treasury Department’s International Affairs Banking team. The key discussion item was the EU’s simple, transparent and standardized initiative and its potential market implications. Please contact Sairah.Burki@sfindustry.org with any questions. If you are interested in joining SFIG’s High Quality Securitization Task Force please contact Alyssa.Acevedo@sfindustry.org.


SFIG currently has three open positions for:

  • Executive/Administrative Assistant: will be responsible for supporting the Executive Director and Directors of Policy and Advocacy while directing overall front office activities, including the reception area, mail, calendar coordination, meeting set-up, purchasing requests and overall office management. Additional information on the position, as well as a link to the application, is available here.
  • Data/Policy Analyst: will help support group-wide strategy efforts and initiatives as they relate to the association’s database and various policy requirements. The Analyst will also support SFIG’s advocacy efforts through development of a political action committee database. Additional information on the position, as well as a link to the application, is available here.
  • Communications and Media Manager: will be an integral member of SFIG staff, providing support across the whole organization and serving as a vital link between SFIG, its membership and other external audiences. Additional information on the position, as well as a link to the application, is available here.

Some of the latest industry positions available include:


Associate Director/Director, Asset Backed

  Fitch Ratings 01-12-2016

Associate Director/Director, Residential
Mortgage Backed Securities

  Fitch Ratings 01-07-2016
Associate Director, ABS Ratings     01-07-2016
Analyst   Moody’s Corporation 12-15-15
Associate Analyst   Moody’s Corporation 12-15-15
AVP - Analyst   Moody’s Corporation 12-15-15
VP – Senior Analyst   Moody’s Corporation 11-02-15
Associate Analyst 2   Moody’s Corporation 11-02-15
Senior Vice President, RMBS Monitoring   Moody’s Corporation 11-02-15
High Yield - Legal Analyst   Babson Capital Management 10-22-15
Finance Associate   Hogan Lovells US LLP 10-09-15

Please visit our Jobs page for a full listing of available positions.

For questions about positions at SFIG, please contact Jobs@sfindustry.org. For questions about the website jobs portal, please contact Website@sfindustry.org.


THURSDAY, January 14, 2016
1:00 p.m. – 2:00 p.m. (ET)


WEDNESDAY, January 20, 2016
2:00 p.m. – 3:00 p.m. (ET)


FRIDAY, January 22, 2016
11:30 a.m. -12:30 p.m. (ET)


SUNDAY, February 28, 2016 – WEDNESDAY, March 2, 2016
The Aria Resort & Casino
Las Vegas, NV
Registration is available here.


SUNDAY, February 28, 2016 
3:00 p.m. - 5:00 p.m. PT
The Aria Resort & Casino
Las Vegas, NV
Registration opening January 21, 2016.


TUESDAY, May 31, 2016 – WEDNESDAY, June 1, 2016
Hyatt Regency Toronto
Toronto, Ontario
Registration is available here.


If you would like to participate in the work SFIG is undertaking through our committees as highlighted below, please e-mail Committees@sfindustry.org. For specific inquiries on any of SFIG’s advocacy efforts, please contact the staff member listed for the related project.

SFIG’s Marketplace Lending Committee was established in August 2015, as an SFIG participant committee and is open to all SFIG members who have a legitimate interest in marketplace lending. The committee was formed with two primary intentions: 1) to work with members involved in marketplace lending to educate the industry as a whole, with a particular focus on the securitization of assets generated through that lending channel; and 2) to determine appropriate securitization-specific policy and engage in related advocacy, leveraging SFIG’s prominence and experience across all asset classes to support the continued responsible growth of securitization in marketplace lending. For its first initiative, the committee commented on the Treasury Department's Request for Input on Online Marketplace Lending. The comments were submitted on September 30th and drafted by counsel at Chapman and Cutler LLP.

Members interested in participating should contact Alyssa.Acevedo@sfindustry.org.

SFIG’s Student Loan Committee will be responding to Fitch’s proposed amendments to FFELP student loan ABS rating methodology. The committee also recently responded to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans.

To join SFIG’s Student Loan Committee and learn more, please contact Alyssa.Acevedo@sfindustry.org.

The RMBS 3.0 Task Force released its Third Edition RMBS 3.0 Green Papers in November 2015. The task force has continued its efforts to address key issues specific to private label mortgage securities through work-streams relating to (1) Representations, Warranties, and Repurchase Enforcement; (2) Due Diligence, Data, and Loan-Level Disclosure; and (3) Role of Transaction Parties and Bondholder Communications. We encourage members to participate in any or all of the working groups to contribute towards the mission of RMBS 3.0. For its 2016 agenda, the task force will address topics including the inclusion of an independent Deal Agent in transactions, Bondholder Communications, Data and Loan-Level Disclosure, Repurchase Enforcement, and Settlements, as well as undertake a review of the previously published Green Papers. SFIG will also be convening the RMBS Issuer Subcommittee to provide feedback on the development of the Representations and Warranties Underwriting Matrix.

For additional information on RMBS 3.0, or to join the task force or RMBS Issuer Subcommittee, please contact Amanda.Bateman@sfindustry.org.

SFIG, through its GSE Reform Task Force, along with several other trade associations, submitted a letter to the FDIC, Fed and OCC regarding the effect of homeowner’s association ‘super-liens’ on private-label RMBS and whole loan transactions. The task force also submitted comments on FHFA’s update to the single security initiative on October 7, 2015. The task force is expecting to receive an update from the SFIG participants on the Industry Advisory Group for the Common Securitization Platform and Single-Security following its second meeting on December 7th. The task force has also formed policy positions on the Carney-Delaney-Himes GSE Reform bill and updated its briefing book to support its advocacy efforts. With the release of the bill, SFIG staff also updated its GSE Reform Legislative Comparison, which analyzes key provisions in the five most recent housing finance reform bills.

To join SFIG’s GSE Reform Task Force and learn more, please contact Amanda.Bateman@sfindustry.org.

The Mortgage Loan-Level Disclosure Task Force is studying the recent Regulation AB II release of Schedule AL and comparing it to SFIG’s Schedule L submission to the Securities and Exchange Commission in February 2014. SFIG also continues to have weekly Mortgage Industry Standards Maintenance Organization calls to go through data elements that lenders should deliver in securitizations. The task force will also be conducting an analysis of the data elements included in SFIG’s Schedule L submission in order to determine any privacy concerns.

Please contact Amanda.Bateman@sfindustry.org for additional information on SFIG’s work on this topic.

The Volcker Task Force has been working with SFIG’s various asset class and legal counsel committees to identify areas within the Volcker Rule in need of clarification, particularly questions regarding covered funds and the loan securitization exemption.

Please contact Alyssa.Acevedo@sfindustry.org to participate on the Task Force.

The Risk Retention Industry Guide Working Group recently launched its interim Industry Guide, ahead of the RMBS compliance date, focused on issues either relevant to all asset classes or specific to RMBS. The working Group continues to work on a final guide focused on creating best practices and developing consensus positions around several areas within the Credit Risk Retention final rule.

Please contact Alyssa.Acevedo@sfindustry.org with any questions.

SFIG’s Chinese Market Committee continues to hold discussions with a focus on SFIG’s partnership with the Chinese Securitization Forum, potential upcoming educational discussions and the sharing of recent market developments in China.

If you would like more information on SFIG’s work with respect to Chinese securitization, please contact Alyssa.Acevedo@sfindustry.org.

The Regulation AB II Task Force has been focused on the disclosure and offering process requirements within the final rule. Asset specific work streams have been formed to develop comment letters on the outstanding proposals within the final rule and the Task Force submitted the first part of its comment letter this past June. SFIG submitted a supplemental comment letter covering credit card and equipment floorplan asset classes on January 12, 2016.  Future discussions across asset class committees and the Regulation AB II Task Force will focus on the remaining outstanding proposed rules, including potentially requiring issuers to provide the same disclosure for Rule 144A offerings as required for registered offerings.

SFIG members who are interested in joining this task force or asset specific committees should contact Alyssa.Acevedo@sfindustry.org

The Regulatory Capital and Liquidity Committee is addressing industry concerns related to the Federal Reserve Board’s Final Rule on the Liquidity Coverage Ratio (“LCR”). This committee will also develop a comment letter when U.S. regulators release their proposed Net Stable Funding Ratio (“NSFR”). 

To become involved in SFIG’s advocacy on the final LCR or NSFR rules, please contact Alyssa.Acevedo@sfindustry.org.

The Derivatives in Securitization Task Force obtained no-action relief from the CFTC giving swap dealers comfort that the CFTC would not take enforcement action against swap dealers that did not comply with certain CFTC Regulations when taking actions in response to the credit ratings downgrade of a counterparty to a legacy swap. The relief applies to swaps with SPVs that were in existence prior to October 10, 2013. The task force also commented on the CFTC’s proposal on margin requirements for uncleared swaps, as well as the prudential regulators’ proposal regarding margin and capital requirements for covered swap entities. In October 2015, the prudential regulators approved a Joint Final Rule on Swap Margin Requirements. In November 2015, the CFTC issued their final rule regarding margin requirements for uncleared swaps for swap dealers and major swap participants.

The High Quality Securitization ("HQS”) Task Force responded to the European Commission’s consultation on an EU framework for simple, transparent and standardized securitization on May 12, 2015. The task force also previously responded to the BCBS-IOSCO consultation on its criteria for identifying simple, transparent and comparable securitizations. SFIG’s comments were built off of those sent to the European Banking Authority on January 14th (available here) regarding its proposed criteria and to the European Central Bank and Bank of England last summer (available here) regarding the development of a sustainable securitization market in Europe.

To join the HQS Task Force, please contactAlyssa.Acevedo@sfindustry.org.


According to a recent Financial Times article, the European Commission’s plan to boost Europe’s securitization market through regulatory changes is causing concern over market fragmentation. The EU is in the process of introducing measures for simple, transparent and standardized (“STS”) securitizations that must be originated in the EU. This has raised the question of whether European investors will be discouraged from buying deals originated elsewhere, in particular those created in the US, according to the article.

Market participants believe investor demand may be affected from across the Atlantic as prices for EU STS securitizations increase, potentially discouraging outside investment.

“Both are serious problems,’’ said Alexander Batchvarov, Head of International Structured Credit Research at Merrill Lynch. “This is just another brick in the wall of the domestication and fragmentation of global capital markets. Suddenly, anything that Europeans buy outside Europe becomes non-STS.’’


On January 10th, the Group of Central Bank Governors and Heads of Supervision (“GHOS”), the Basel Committee’s (“Committee”) oversight body, endorsed the new market risk framework as part of the Fundamental Review of the Trading Book (“FRTB”). The proposed framework is expected to be published in the coming days after the FRTB Group finalizes it during their meeting on January 14th.

According to the press release, the GHOS claimed to have achieved notable improvements in the proposed framework, which takes effect in 2019, including:

  • A revised boundary between the banking and trading books that will reduce scope for arbitrage;
  • A revised internal models approach with more coherent and comprehensive risk capture;
  • An enhanced model approval process and more prudent recognition of hedging and portfolio diversification; and
  • A revised standardised approach that serves as a credible fall-back and floor to the model-based approach, and facilitates more consistent and comparable reporting of market risk across banks and jurisdictions.

SFIG and its partner trade associations will continue to inform Congress of the securitization industry’s concerns on the potential negative effects of the FRTB.

The GHOS will also review the Committee's proposals on the risk-weighted framework and the design and calibration of capital floors towards the end of 2016. The Committee will conduct a quantitative impact assessment during the year and will focus on not significantly increasing overall capital requirements.

In addition, the GHOS discussed the final design and calibration of the leverage ratio. It was agreed that the leverage ratio should be based on a Tier 1 definition of capital and should comprise a minimum level of 3 percent. Additional requirements for global systemically important banks were also discussed. The GHOS will finalize the calibration in 2016 to allow sufficient time for the leverage ratio to be implemented as a Pillar 1 measure by January 1, 2018.

Please contact Michael.Flood@sfindustry.org with any questions regarding SFIG’s Advocacy efforts.


According to the January 2016 RMBS Research Report published by Morningstar Credit Ratings last week, issuance of jumbo RMBS is expected to remain slow in the new year. Recovering home prices have improved investor sentiment but not PLS market issuance for three reasons according to Morningstar: 1) issuers find it easier to sell to the agency market than to securitize; 2) agency and whole loan sales can seem more economical than PLS transactions, which can be prohibitively expensive; and 3) issuers are reluctant to loosen their credit standards and originate non-Qualified Mortgage loans.

While jumbo issuance continues to experience a dry spell, issuance of resecuritizations and transactions backed by nonperforming and reperforming loans should continue to grow in 2016. Furthermore, Morningstar predicts a growing number of these transactions will be rated, bolstering investment in RMBS by expanding the investor base and broadening market participation because of favorable capital charges. However, it is the revival of jumbo RMBS issuance that is key to bringing back the PLS market and with the outlook on jumbo grim, Morningstar expects the dearth in private label issuance to continue.


The Federal Housing Finance Agency (“FHFA”) issued a final rule governing Federal Home Loan Bank (“FHLB”) membership requirements on January 12th. The FHFA dropped a part of the 2014 proposal that would have required Home Loan Bank members to maintain a certain percentage of residential mortgage assets in order to keep their membership. An article in National Mortgage News states, “[t]he FHFA acknowledged that 98% of members are already in compliance with the proposed requirements, and that it was too burdensome to impose a new requirement just to weed out the remaining 2%.” In addition, the FHFA is prohibiting real estate investment trusts from accessing funding through the Home Loan Bank system by defining “insurance companies” to exclude “captive insurers” in the final rule. “All current captive insurance companies who are members of the system must exit over the next five years,” said the FHFA.

Many Home Loan Banks said that prohibiting REITs from accessing the system was a mistake and a bipartisan group of lawmakers introduced a bill in October that was aimed at stopping the FHFA from finalizing its plan. The Director of FHFA, Melvin Watt said, “FHFA has the authority and the duty to implement the statutory membership provisions of the Federal Home Loan Bank Act and by adopting the proposal to exclude captives from the definition of insurance company we are making sure that institutions can’t frustrate the intent of Congress.”


In a report published yesterday, January 12th, Fitch Ratings states the risk of lender non-compliance with the Truth in Lending Act RESPA Integrated Disclosure (“TRID”) requirements should be modest for private label RMBS investors. Fitch acknowledges there will likely be a higher frequency of non-compliance issues as lenders begin to implement the changes required by TRID, but finds “initial due diligence sampling of prime Jumbo mortgages in the secondary market has indicated a high level of compliance issues thus far, most of which appear to be good faith errors.” 

In its assessment of the risk TRID poses to RMBS investors, Fitch assumes RMBS investors will be exposed to statutory damages of $4,000 plus legal fees while additional actual damages will be difficult to prove; class-action lawsuits are unlikely due to low limits on rewards. Furthermore, borrowers are unlikely to hire attorneys to seek damages, mitigating the chance for defensive claims in non-judicial states or affirmative claims in any state.

Based on the CFPB's public guidance on TRID liability, Fitch assumes only errors outside of any allowed tolerance in the following seven areas will be likely to be rewarded statutory damages: (i) amount financed, (ii) finance charge, (iii) annual percentage rate, (iv) total of payments, (v) payment schedule, (vi) statement of security interest and (vii) maximum allowable payment for an adjustable rate mortgage. Finally, Fitch states “uncured errors in [those seven areas] noted by a third-party due diligence firm will be assumed to be ‘apparent on its face’ to investors and will therefore carry assignee liability.” Fitch expects to only adjust its mortgage pool loss projections for uncured TRID errors in those areas.


After releasing a final rule regarding Home Mortgage Disclosure Act (“HMDA”) reporting requirements in October, the Consumer Financial Protection Bureau (“CFPB”) is seeking feedback from lenders regarding re-submission guidelines. The guidelines set specific parameters for error rates beyond which lender must resubmit mortgage lending data to the CFPB based on certain error thresholds. Specifically, the CFPB is asking for whether systemic errors should be treated differently or whether some errors may be allowable in HMDA data. According to an article in National Mortgage News, lenders would prefer higher thresholds because data resubmission is costly and is considered punitive by some lenders. 

CFPB Director Richard Cordray said “We are seeking feedback from stakeholders on how to best ensure the accuracy and reliability of mortgage lending information” in a press release last week. 


David Bowie, who passed away on Sunday, was the first artist to securitize royalty streams, according to a Bloomberg article. In 1997, $55 million of Bowie Bonds were issued, backed by future earnings from his many hit songs, including “Space Oddity” and “Changes”. The securities were backed by royalty payments which “allow artists to raise money without selling off their works completely, or waiting years for payments to come in.” 

This first royalty transaction “paved the way for a now thriving market for esoteric asset-backed securities.” According to Rob Ford, a London-based money manager at TwentyFour Asset Management, “not only were [Bowie Bonds] followed by a number of other artists, but they set a template for deals backed by a whole range of assets.”


SFIG has a number of Committees and Task Forces meeting and working on many topics of interest to the securitization industry. Please email us for more information, including how to join.

SFIG is pleased to share this edition of its newsletter with our members, as well as our supporters in the structured finance community. To ensure that you receive future editions of the newsletter, please visit our website or email us to learn more about membership opportunities.

Contact Information

Richard Johns Executive Director

Kristi Leo Investor Relations

Sairah Burki Senior Director, ABS Policy

Michael Flood Director, Advocacy

Dan Goodwin Director, Mortgage Policy

Jennifer Wolfe ABS Policy Manager

Mary Robinson Policy Manager

Alyssa Acevedo Senior Analyst, ABS Policy

Amanda Bateman Senior Policy Analyst

Daniel Tees Policy Analyst

Jennifer Serpas Office Manager

Sarah Clarke Events Coordinator

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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