The Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission has issued an interpretation clarifying commodity pool treatment for certain securitizations and a no-action letter providing additional relief for certain legacy securitization entities. Specifically, the letter explains when exclusion from commodity pool regulation for certain securitization vehicles that do not meet any of the criteria set forth in an October 2012 no-action letter is appropriate. It also provides relief for certain securitization vehicles formed before Oct. 12, 2012. In the October no-action letter, the CFTC spelled out...

Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act will carry two key “unintended consequences” for the structured finance industry should it be implemented in its current form, a trade group representative warned lawmakers this week. Testifying before the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, American Securitization Forum Executive Director Tom Deutsch said that Title VII’s treatment of commodity pools and margin requirements triggers two potential “compliance challenges” for some parties in securitization transactions that may hurt all of the beneficiaries of the deal. “We would not have expected...

Two separate white papers from industry trade groups on reform of the government-sponsored enterprises call for a strong government role to provide stability and liquidity in multifamily mortgage finance. The Mortgage Bankers Association called for a system of private capital finance for multifamily housing, with a focus primarily on securitization and the federal government serving as a catastrophic insurer. The program would be funded through risk-based premiums paid by the entities that securitize the loans, according to Brian Stoffers, president of CBRE Debt and Equity Finance. “We recognize...

Analysts expect the U.S. economic recovery to continue on a slow, weak path into 2013 with the potential for a new recession that could weaken the residential MBS market. At Standard & Poor’s, analysts predict a “slow and uneven” economic recovery with a 15 percent to 20 percent chance of another recession that would be less severe than the 2008-2009 financial crisis but potent enough to sap the MBS market. S&P assumes a reversal in home prices and unemployment rising to near 9 percent in 2013, which could hamper borrower capacity to make their mortgage payments. Overall, S&P’s outlook for the single-family MBS market is...

Despite the ever-increasing volume of political chatter that the White House is poised to nominate a new director of the Federal Housing Finance Agency, industry observers tell Inside The GSEs they aren’t altogether convinced the Obama administration is able or even willing to effect agency regime change and assume full ownership of the GSEs at this time. Following President Obama’s re-election last month, speculation shifted quickly from “if” to “when” Edward DeMarco, a Bush-era hold-over who recently began his fourth year as the FHFA’s “temporary” head, would be replaced.

Despite gains in oversight and reform of the compensation packages for Fannie Mae’s and Freddie Mac’s top-level executives, the Federal Housing Finance Agency needs to beef up its reviews and examinations of the pay packages for the scores of vice presidents and directors currently employed by the two GSEs, according to the Finance Agency’s official watchdog. The FHFA’s Office of Inspector General report released this week noted a “significant cost” involved in the compensation of the two GSEs’ nearly 12,000 employees.

The Federal Housing Finance Agency announced this week that Steven Cross, the FHFA’s deputy director of the Division of Federal Home Loan Bank Regulation, will retire from the agency in March 2013. Cross served as the Finance Agency’s overseer of the 12 FHLBanks since the FHFA was created in October 2008, while simultaneously serving as the agency’s chief operating officer from September 2009 to December 2011. FHFA Acting Director Edward DeMarco credited Cross’ “vital role” during a “period of upheaval in the housing and financial markets and significant development and change at FHFA.”

Democrats are making another attempt to require the forgiveness of principal on delinquent mortgages guaranteed by Fannie Mae and Freddie Mac as the White House and lawmakers are in talks to avoid the pending fiscal cliff. This week a group of 18 House Democrats dispatched a letter to President Obama and congressional leaders of both parties urging them to expand assistance to borrowers as part of any tax increase and spending cut resolution package. “Given the clear benefits of providing assistance to underwater borrowers, as well as the significant savings for the American taxpayers, we believe that provisions expanding such assistance should be part of any deal to resolve the fiscal cliff,” the members wrote. “At a minimum, such legislation should require that Fannie Mae and Freddie Mac offer principal reduction loan modifications to borrowers who are net present value positive.”

Despite House passage of an immigration bill that would squeeze revenue from Fannie Mae and Freddie Mac guaranty fees, the measure doesn’t look like it’s going anywhere in the Senate but industry groups remain wary of future attempts to pickpocket the GSEs. Two weeks ago, the House passed H.R. 6429, the STEM Jobs Act of 2012, which would provide visas for qualified workers in the fields of science, technology, engineering and mathematics (STEM). …

In what has become an annual tradition, Fannie Mae and Freddie Mac each announced last week that all foreclosure-related evictions of single-family and two-to-four unit properties are suspended nationwide until after the New Year. “We are instructing our foreclosure attorneys to suspend pending eviction lockouts on foreclosed homes in order to provide a greater measure of certainty to families during the holiday season,” said Tracy Mooney, Freddie’s senior vice president of servicing and REO.