January 28, 2015 Newsletter
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January 28, 2015
 

SFIG News

SFIG Calendar

Advocacy Outlook

Industry News Highlights

 
SFIG NEWS
SFIG AND IMN ANNOUNCE MARY MATALIN AS NEW ABS VEGAS KEYNOTE SPEAKER ADDITION WITH OVER 5,500 REGISTERED TO ATTEND
Mary Matalin
Earlier today, SFIG announced Mary Matalin as Keynote Speaker and the newest addition to ABS Vegas 2015. Matalin is one of the most celebrated and popular conservative voices in America. As an author, television and radio host, and widely sought after political contributor, pundit and public speaker, she has become noted for her straightforward manner and insightful political repartee. Among her many roles and accomplishments, she has served under President Ronald Reagan, made her mark as George H.W. Bush's campaign director and most recently as assistant to President George W. Bush, and as assistant and counselor to Vice President Dick Cheney, making her the first White House official to hold that double title.  Matalin makes frequent televisions appearances as a political commentator, securing a career in conservative media advocacy following decades of work in the GOP political trenches.

Mary Matalin joins an impressive line-up of speakers and events at ABS Vegas 2015, including Barney Frank. With well over 150 sponsors and 5,500 attendees including nearly 2,300 investors and issuers, this year’s conference is on target to exceed past attendance as the largest global capital markets conference in the world.

 
 
SFIG TO COMMENT ON PROPOSED CHANGES TO FDIC SECURITIZATION SAFE HARBOR RULE
The FDIC is proposing revisions to certain provisions of its securitization safe harbor rule (“Securitization Safe Harbor”), which relates to the treatment of financial assets transferred in connection with a securitization or participation, in order to clarify the requirements of the Securitization Safe Harbor as to the retention of an economic interest in the credit risk of securitized financial assets upon and following the effective date of the credit risk retention regulations adopted under Section 15G of the Securities Exchange Act. The staff memo can be found here. SFIG will comment on this proposal, with comments due 60 days after publication in the Federal Register. If you would like to participate in this effort, please email Daniel.Tees@sfindustry.org.
 
 
SFIG TO COMMENT ON “SIMPLE, TRANSPARENT AND COMPARABLE” ABCP

On Friday, SFIG’s ABCP Committee agreed that comments currently being developed by the High Quality Securitization Task Force on criteria proposed by the Basel Committee in Banking Supervision (“BCBS”) and International Organization for Securities Commissions (“IOSCO”) should include specific feedback on asset backed commercial paper (“ABCP”). While the consultative document does not propose criteria for ABCP, the BCBS and IOSCO welcome industry feedback on these markets. As stated on page 9 of the document:

The BCBS and IOSCO work thus far has focused on term securitisations. Short-term securitisations (eg ABCP), are therefore out of the scope of the current STC criteria. However, they are a key part of securitisation markets and provide an important source of funding to the real economy. Similar to term securitisations in most jurisdictions, the outstanding volume and issuance of ABCP have dropped significantly post-crisis…The BCBS and IOSCO are requesting comment on these markets and criteria for these markets…

Specifically, BCBS/IOSCO ask on p. 12:

What are respondents’ views on the state of short-term securitisation markets and the need for Initiatives with involvement from public authorities? Do respondents consider useful the development of differentiating criteria for ABCP, in a manner similar to that of term securitisations? The BCBS and IOSCO would particularly welcome any data and descriptions illustrating the state of short-term securitisation markets by jurisdiction and the views of respondents on concrete comparable criteria that could be applied to short-term securitisations.

In previous comments submitted in response to the European Banking Authority’s (“EBA”) consultation for high quality securitizations, SFIG evaluated the treatment of term ABS against the proposed criteria. SFIG additionally evaluated term ABS against related criteria proposed by the European Central Bank and the Bank of England in comments submitted last summer. The inclusion of ABCP in SFIG’s comments to the BCBS and IOSCO will mark an expansion of our advocacy on this subject and members interested in learning more are encouraged to contact Amanda.Bateman@sfindustry.org.

 
 
LIMITED SPACES REMAINING FOR LAUNCH OF WOMEN IN SECURITIZATION!
Since opening registration last Thursday, more than 200 women have signed up to join the inaugural event of Women in Securitization at ABS Vegas 2015.

To celebrate this initiative, we invite the women of structured finance to join us for an afternoon of “High Tea” and cocktails, with an interactive poker program presented by Poker Divas.

Space is limited so register for Women in Securitization today!

When:  Sunday, February 8, 2015 from 3:00-5:00 p.m. PST
Where:  Deuce Lounge at the Aria, Las Vegas NV

Presented by SFIG with the generous support of:

 Chapman and Cutler LLP
 Fitch Ratings
 Wilmington Trust

Women in Securitization connects the women of our industry to peers, mentors and sponsors, and ideas that will positively influence industry perceptions and practices to facilitate an environment in the securitization community that encourages women’s advancement. For additional information on the event or Women in Securitization, please contact WIS@sfindustry.org.
 
 
SFIG CALENDAR
BIWEEKLY CREDIT CARD ISSUER COMMITTEE CALL

THURSDAY, January 29, 2015
10:00 a.m. – 11:00 a.m. (EST)

 
 
BIWEEKLY RESIDENTIAL MORTGAGE COMMITTEE CALL REGARDING REGULATION AB II

THURSDAY, January 29, 2015
2:00 p.m. – 3:00 p.m. (EST)

 
 
MONTHLY LEGAL COUNSEL COMMITTEE CALL

MONDAY, February 2, 2015
11:00 a.m. – 12:00 p.m. (EST)

 
 
WEEKLY HIGH QUALITY SECURITIZATION TASK FORCE CALL

TUESDAY, February 3, 2015
10:00 a.m. – 11:00 a.m. (EST)

 
 
BIWEEKLY RISK RETENTION INDUSTRY GUIDE CALL

TUESDAY, February 3, 2015
11:00 a.m. – 12:00 p.m. (EST)

 
 
BIWEEKLY REGULATION AB INDUSTRY GUIDE CALL

TUESDAY, February 3, 2015
2:00 p.m. – 3:00 p.m. (EST)

 
 
BIWEEKLY NRSRO DUE DILIGENCE INDUSTRY GUIDE CALL

THURSDAY, February 5, 2015
3:00 p.m. – 4:00 p.m. (EST)

 
 
SFIG & IMN ABS VEGAS 2015

SUNDAY, February 8, 2015 – WEDNESDAY, February 11, 2015
The Aria Resort and Casino
Las Vegas, NV
Registration available here

 
 
WOMEN IN SECURITIZATION LAUNCH EVENT

SUNDAY, February 8, 2015
3:00 p.m. – 5:00 p.m. (PST)
The Deuce Lounge at the Aria
Las Vegas, NV
Sign up for Women in Securitization here.

 
 
ABS VEGAS Q&A SESSION WITH THE SEC

MONDAY, February 9, 2015
11:00 a.m. – 12:00 p.m. (PST)
The Aria Resort and Casino
Las Vegas, NV
Please note, there will not be a dial-in provided for this meeting.

 
 
CHINESE SECURITIZATION FORUM 2015 ANNUAL CONFERENCE

TUESDAY, March 24, 2015 – WEDNESDAY, March 25, 2015
JW Marriott Hotel
Beijing, China
Registration available here

 
 
ADVOCACY OUTLOOK

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.

The RMBS 3.0 Task Force released its Second Edition RMBS 3.0 Green Paper in November. Following the successful SFIG/IMN Private Label RMBS Symposium, the Task Force will continue 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 additional information on RMBS 3.0, or to join the Task Force, please contact Mary.Robinson@sfindustry.org.

The GSE Reform Task Force has been actively engaging the Federal Housing Finance Agency (“FHFA”) in recent months on several fronts, including SFIG’s response to the proposed structure for a single agency security. SFIG has also submitted comments on guarantee fee pricing and FHFA’s Strategic Plan for 2015-2019. The Task Force previously reviewed various proposals in Congress including the Johnson-Crapo bill, with SFIG staff summarizing members’ recommendations in a briefing book, and the PATH Act. If you would like to learn more about SFIG’s activities in these areas, 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 of 2014. SFIG also continues to have weekly Mortgage Industry Standards Maintenance Organization calls to go through data elements that lenders should deliver in securitizations. We 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 Mary.Robinson@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 Amanda.Bateman@sfindustry.org to participate on the Task Force.

The Risk Retention Industry Guide Work stream is creating best practices and developing consensus positions around several areas within the Credit Risk Retention final rule. Please contact Amanda.Bateman@sfindustry.org with any questions.

SFIG’s Chinese Market Committee continues to hold regular calls focusing on a high-level description of SFIG’s partnership with the Chinese Securitization Forum, potential upcoming educational discussions and sharing recent market developments in China. If you would like more information on SFIG’s work with respect to Chinese securitization, please contact Amanda.Bateman@sfindustry.org.

SFIG’s Shadow Banking Task Force has established the following agenda:

  • Leverage the predictive powers of the G20’s shadow banking initiative to determine future SFIG advocacy initiatives;
  • Assess the level of regulation to which our members are already subject;
  • Measure the full impact of those regulations on lending decisions and business models; and
  • Provide input into IOSCO, BCBS and IAIS on the revitalization of securitization markets.

The Task Force will have its first full meeting in the coming weeks, and members from across asset classes are encouraged to participate. To register your interest in SFIG’s Shadow Banking Initiative, please contact Amanda.Bateman@sfindustry.org.

The Regulation AB II Task Force will focus on the disclosure and offering process requirements within the final rule. Two work streams have been formed to develop a comment letter on the proposed rules that remain outstanding and to produce an industry guide for critical elements of the final rule. Monthly task force calls will be held to identify and address key questions regarding the implementation of the final rule. We will also be holding biweekly calls for the asset-level committees. SFIG members who are interested in joining this task force or asset specific committees should contact Mary.Robinson@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 review the BCBS final standard for the Net Stable Funding Ratio (“NSFR”) and develop a comment letter when U.S. regulators release their proposed NSFR. To become involved in SFIG’s advocacy on the Final LCR rule or NSFR, please contact Mary.Robinson@sfindustry.org.

The Derivatives in Securitization Task Force recently 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. SFIG also submitted a comment letter at the end of June 2014, advocating for asset-backed securities issuers to qualify for the “low-risk financial end user” designation proposed by prudential regulators in the original proposal. SFIG members who are interested in learning more about this initiative should email Amanda.Bateman@sfindustry.org.

The NRSRO Due Diligence Industry Guide Work stream is continuing to review the due diligence elements of the Final Rules on NRSROs. The working group meets biweekly on Thursdays at 3:00 p.m. (EST) and members interested in learning more should contact Amanda.Bateman@sfindustry.org.

The Money Market Fund Reform Working Group submitted a comment letter on October 13, 2014 regarding the Securities and Exchange Commission’s July 23rd proposal which includes, among other things, possibly amending rule 2a-7’s issuer diversification provisions to eliminate an exclusion that is currently available for securities subject to a guarantee issued by a non-controlled person. SFIG also submitted a comment letter in September 2013 on Money Market Fund Reform. If you are interested in joining this working group, please contact Amanda.Bateman@sfindustry.org.

The High Quality Securitization Task Force is currently developing a response to the BCBS-IOSCO consultation on its criteria for identifying simple, transparent and comparable securitizations. Comments are due on February 13, 2015 and the task force will meet on Tuesdays at 10:00 a.m. (EST) until then to formulate its views. SFIG’s comments will build 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 High Quality Securitization Task Force and contribute to the BCBS-IOSCO comment letter, please contact Amanda.Bateman@sfindustry.org.

 
 
INDUSTRY NEWS HIGHLIGHTS
U.S. SOLAR INDUSTRY SETS SIGHTS ON SECURITIZATION MARKETS
According to a recent Moody’s report, the U.S. rooftop solar photovoltaic (“PV”) industry has achieved the scale and maturity to enter into securitization markets as a new class of asset-backed securities. Solar asset-backed securities (“ABS”) are backed by pools of rooftop solar PV systems with long-term contractual payments.

Due to federal investment tax credits for the solar industry set to decline in early 2017, solar developers will be looking to securitization as a new source of financing for solar projects. However, as uncertainty exists over their long-term viability the initial solar securitizations will be accompanied by several key risks until they can demonstrate a proven track record in the market.
 
 
CFTC REPORTEDLY CONSIDERS DELAY TO IMPLEMENTATION OF SWAP MARGIN REQUIREMENTS
U.S. Commodities Future Trading Commission ("CFTC") Chairman, Timothy Massad said on Friday that his agency is considering postponing implementation of margin requirements for uncleared swaps. According to a report in the Financial Times, Massad told reporters during a trip to Singapore, "I'm having discussions with my fellow regulators in the US because we have to coordinate our rules as well as with regulators internationally on that issue, and some other issues where the rules might be different." However, despite recognizing the need for additional time to comply so that the rules can be set and published first, Massad said that the two-year extension requested by some in the industry seems "awfully long."

Reforming derivatives markets has been a priority on the G2O's financial reform agenda since the crisis, and regulators from the U.S., EU and Japan have published proposals on how much margin should be set aside for swaps that cannot be processed through clearing houses. SFIG commented on the proposals issued by the CFTC and prudential regulators through its Derivatives in Securitization Task Force which argued for an extension on the basis that imposing margin requirements on uncleared swaps in the US would put US securitization at a competitive disadvantage relative to their European peers who would be allowed to treat SPVs as “NFC" entities that don’t require margin posting. To join the Derivatives in Securitization Task Force and learn more, please contact Amanda.Bateman@sfindustry.org.
 
 
SUPREME COURT DECISION IN JESINOSKI CASE ON TILA MAY GENERATE CONFUSION
According to an article in Scotsman Guide, the recent U.S. Supreme Court (the “Court”) decision in Jesinoski v. Countrywide could generate confusion for mortgage lenders. In Jesinoski, the Court held that the Truth in Lending Act (“TILA”) only requires written notice to a mortgage lender within three years in lieu of requiring a borrower to file a lawsuit. TILA allows a borrower to rescind within the first three days following the consummation of a mortgage transaction or the delivery of the disclosures required under TILA. However, this right is extended to three years if a lender fails to make the required disclosures under TILA.

However, the Court did not clarify what happens after a lender receives a letter. The Supreme Court decision upholds the written notice procedure, as long as it occurs within three years. The court did not decide how consumers and creditors should resolve payments of loans. “In terms of getting certainty out of the decision, the balance has shifted toward borrowers,” said Snell & Wilmer attorney M. Lane Molen. “We all know that lenders don’t like uncertainty.”  “It really is going to force lenders, once they’re aware of rescission, to take some sort of action, possibly in the nature of litigation in order to address the impact of rescission, which is in effect saying a lien is void,” Joseph Lynyak, partner with the law firm Dorsey & Whitney said.  

National Mortgage News also wrote a similar article indicating that the legal battle over rescission is just beginning. “And because rescission attempts are expected to increase due to the lower bar to begin the process, lawyers said banks will increasingly turn more to the courts,” the article stated. “When a rescission is ordered by the courts, there is an unwinding of the loan transaction. The lender or servicer must reimburse the borrower for all the interest payments made on the loan. Typically, the borrower then pays off the outstanding principal balance by refinancing. If a rescission request is before a judge, TILA allows homeowners to litigate their case on the merits before it is determined if they can meet their share of the financial responsibility to unwind the contract, such as repaying principal,” National Mortgage News continued.

SFIG filed an Amicus Brief in support of the position that a borrower must actually file suit prior to the lapse of a three year period set forth in TILA and that written notice should not be sufficient for a borrower seeking to rescind. In the Amicus Brief, SFIG highlighted the potential impact on the private label mortgage-backed securities market if the Court ruled that written notice was sufficient to rescind a mortgage under TILA, including the prospect for additional claims by borrowers and the potential for disputes among transaction parties with respect to representations and warranties.
 
 
FHFA DIRECTOR WATT TESTIFIES ON GSE’S BEFORE HOUSE FINANCIAL SERVICES COMMITTEE
Yesterday, Federal Housing Finance Agency (“FHFA”) Director Melvin Watt testified before the House Committee on Financial Services (“Committee”).  The purpose of the hearing was to receive an update from Director Watt on measures the FHFA has taken as conservator of Fannie Mae and Freddie Mac (“the GSEs”), the current state of private sector participation in the housing finance market, and whether adequate steps are being taken to encourage additional private capital in the housing finance marketplace. Important to SFIG members, Director Watt responded to the following items:

  1. Guarantee fee (“g-fee”) pricing: Director Watt expects to issue a report and make an announcement on g-fee pricing by the end of March, though he noted the timetable could slip to the second quarter. 
  2. Conforming loan limits: Director Watt indicated that the FHFA is required by statute to regularly review conforming loan limits. However, the FHFA has not made any determination about adjusting said limits.
  3. Common Securitization Platform (“CSP”): Director Watt stated that development of the CSP is a multi-year project, and that he is in constant contact with the industry in order to get it right.  He did not offer a specific date for release of a CSP progress report.
  4. Bringing private capital back to the housing finance marketplace: Director Watt believes that the primary tool for attracting private capital to the housing finance system is through testing different risk sharing models. The FHFA has therefore increased the goal for risk sharing transactions in its 2015 Scorecard to at least $150 billion for Fannie Mae and $120 billion for Freddie Mac.
  5. GSE acceptance of loans with 3% down payments: Watt stated that the FHFA has instructed the GSE’s that they may accept loans with 3 percent down payments if they are deemed to be soundly underwritten. However, banks are not required to deliver such loans to the GSE’s.

“Within the last 12 months FHFA has announced three different policies that are harmful to transitioning us to a sustainable housing finance system that protects both homeowners and taxpayers,” stated Committee Chairman Jeb Hensarling (R-TX), referring to the FHFA’s suspension of a previously scheduled increase in g-fees, the acceptance of 3 percent down payment loans, and funding of the Housing Trust Funds.

 
 
SHELBY AND BROWN ANNOUNCE BANKING SUBCOMMITTEE LEADERSHIP FOR 114TH CONGRESS

Senator Richard Shelby (R-AL), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs (“Committee”), and Committee Ranking Member Senator Sherrod Brown (D-OH) announced subcommittee chairmen and ranking members for the 114th Congress.

  • Subcommittee on Securities, Insurance and Investment
    • Chair: Senator Mike Crapo (R-ID)
    • Ranking Member: Senator Mark Warner (D-VA)
  • Subcommittee on Financial Institutions and Consumer Protection
    • Chair: Senator Patrick Toomey (R-PA)
    • Ranking Member: Senator Jeff Merkley (D-OR)
  • Subcommittee on Housing, Transportation and Community Development
    • Chair: Senator Tim Scott (R-SC)
    • Ranking Member: Senator Robert Menendez (D-NJ)
  • Subcommittee on Economic Policy
    • Chair: Senator Dean Heller (R-NV)
    • Ranking Member: Senator Elizabeth Warren (D-MA)
  • Subcommittee on National Security and International Trade and Finance
    • Chair: Senator Mark Kirk (R-IL)
    • Ranking Member: Senator Heidi Heitkamp (D-ND)

“Subcommittees play an important role in ensuring that the Banking Committee is productive,” said Chairman Shelby. “I am confident in the leadership of our subcommittees and look forward to working them in the 114th Congress,” stated Senator Shelby.

 
 
HOUSE FINANCIAL SERVICES VICE-CHAIRMAN CALLS FOR DODD-FRANK CHANGES TO GET LENDING MOVING AGAIN
Congressman Patrick McHenry (R-NC), the Vice-Chairman of the House Committee on Financial Services (“Committee”), hopes to play a part in Congress moving forward legislation that further scales back the Dodd-Frank regulatory law, enacted in 2010 in the wake of the 2008 recession, and the opening up of lending to businesses by easing restrictions on small banking institutions.

“The number one priority is to ensure that we get lending moving again,” McHenry said, during a phone interview. “Small community banks and credit unions have been harmed by the regulatory agenda in Washington that makes it more costly to get credit and less available in a time where families and small businesses need access to capital. In addition to that, it’s important that we ensure that the government is no longer on the hook for bailouts of banks, or any other institution, for that matter, in the United States. We’re working through changes to Dodd-Frank to ensure that the government is not on the hook for bailouts going forward,” stated McHenry.
 
 
CONCERN REGARDING HAMP BORROWERS ABSORBING HIGHER PAYMENTS WHEN MORTGAGE MODIFICATIONS RESET
According to an article in DSnews, approximately 500,000 borrowers who received a mortgage modification in 2010 as part of the U.S. Government’s Home Affordable Modification Program (“HAMP”) are due to reset in 2015 and will be facing increasing monthly mortgage payments. HAMP was launched in 2009 to help struggling homeowners reduce their mortgage payment to 31 percent of their monthly income. 

Of the approximately 60,000 permanent modifications completed in 2009, the first year of HAMP, about 42 percent of those modifications were 90 or more days delinquent 42 months after the modification became permanent. Of the nearly 511,000 HAMP modifications with a vintage of 2010, that percentage was about the same for those with a 2009 vintage – about 41 percent. That is double the percentage of overall 90-day delinquency rate of all HAMP mods completed through the second quarter of 2013, which is 20 percent.

The article stated that the Treasury Department has been considering the possibility of re-defaults on HAMP mods and has ways of helping those borrowers for years. "In addition, we are looking at whether financial counseling for borrowers at the beginning of a modification can be effective in reducing re-default risk," Mark McArdle, Chief Homeownership Preservation Office at Treasury, wrote in 2013. "While re-default remains an unfortunate outcome for some borrowers, clearly without HAMP, national foreclosures rates would have been much higher and many borrowers would not have received the assistance they needed. HAMP continues to be the strongest available program for mortgage modifications. Receiving assistance through HAMP gives homeowners a valuable opportunity to strengthen their financial footing and stay in their homes."
 
 
STUDY FINDS GOVERNMENT LOANS GOING PRIMARILY TO FIRST-TIME HOMEBUYERS
The American Enterprise Institute's ("AEI") National Center on Housing Risk released two indexes last week that show both an increase in the share of government-guaranteed mortgages going to first-time buyers as well as an increase in the default risk for that category of borrowers. According to the AEI index, more than 55 percent of government-guaranteed mortgages went to first-time homebuyers in December 2014, with the Federal Housing Agency backing about 81 percent of such loans and the Department of Veterans Affairs backing more than 50 percent.

The findings conflict with the results of a survey from the National Association of Realtors ("NAR") which suggested that few first-time buyers are entering the housing market. According to those results, only 33 percent of buyers were first-time buyers, while the historical norm is about 40 percent. However, AEI claims its data is more accurate as it includes millions of government-backed loans compared to the NAR's smaller sample.

According to the AEI's index measuring default risk, about 15 percent of first-time buyers were at risk in December, with 68 percent of such mortgages having loan-to-value ratios greater or equal to 95 percent; 25 percent with a debt-to-income ratio higher than 43 percent, and 20 percent with a credit score below 660.
 
 
SUPER LIEN DEBATE: FHFA INTERVENING IN SUITS; NEVADA STATE LEGISLATURE CONSIDERING ACTION
The Nevada Supreme Court ruled in SFR Investments Pool 1, LLC vs U.S. Bank that a home owner association’s lien not only takes priority over a first mortgage but that it also extinguishes the mortgage. According to an article in National Mortgage News, the Federal Housing Finance Agency (“FHFA”) has apparently intervened in several cases as conservator of Fannie Mae and Freddie Mac and FHFA Director Mel Watt reiterated his concern over the super liens in testimony before the House Financial Services Committee on Tuesday. 

The article states that “according to a senior government official speaking on the condition of anonymity, attorneys representing FHFA have intervened in at least six cases in Nevada, and there may be more on the way.” There is speculation that FHFA may not allow Fannie Mae and Freddie Mac to purchase mortgages made in Nevada if the situation is not remedied. 

Simultaneously, the Nevada Mortgage Lenders Association has helped forge a working group that includes both Republican and Democrat State Senators to introduce legislation that would contain the following provisions:

  1. A requirement that homeowners associations notify lenders of foreclosure efforts;
  2. A requirement that opening auction bids start at fair market value to prevent fire sales; and
  3. A mechanism for mortgage lenders to recoup losses on their mortgages.

However, according to the Nevada Mortgage Lenders Association Vice Chairman, Steve VanSickler, “it does not appear that we have broad support.” The article states that the recent switch in control of the Nevada State Assembly from Democrats to Republicans may hurt the legislation’s prospects.

 
 
RICHMOND STILL WORKING ON EMINENT DOMAIN PROPOSAL
On Tuesday, former Mayor and current Councilmember Gayle McLaughlin appeared before the Richmond, California City Council to put forward a plan to purchase and modify distressed mortgages from Fannie Mae, Freddie Mac, and the U.S. Department of Housing and Urban Development. Of note to SFIG members, she noted that while this plan targets loans outside of securitization, the city is still working on its eminent domain program and engaging other cities to target mortgages in private label mortgage-backed securities.
 
 

SFIG COMMITTEES AND TASK FORCES

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

Sonny Abbasi Director of MBS Policy

Sairah Burki Director of ABS Policy

Michael Flood Director of Advocacy

Mary Robinson Policy Manager

Alyssa Acevedo Policy Analyst

Amanda Bateman Policy Analyst

Jennifer Serpas Office Manager

Allison Creswell Executive Administration


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