An ugly reality for land owners, mortgage lenders and others: the National Flood Insurance Program is currently $23 billion in debt and in dire need of reform.
New issuance of non-mortgage ABS fell 6.6 percent last year even though the market’s biggest segment pushed to a new post-crash high, according to a new Inside MBS & ABS analysis. A total of $173.05 billion of non-mortgage ABS were issued in 2015, the second-highest annual output since 2008. The direction, however, was less encouraging. New issuance tumbled 17.1 percent from the third to the fourth quarter, sinking to $30.69 billion – the lowest three-month total in over three years. But with record sales in the U.S. auto industry, securitization of vehicle-finance contracts increased...[Includes two data tables]
About a month after risk-retention requirements took effect for newly issued non-agency MBS, industry participants continue to work on complying with the standards set by the Dodd-Frank Act. Non-agency MBS issued on Dec. 24, 2015, and beyond are subject to risk-retention standards. The standards will apply to other MBS and ABS asset types for deals issued on and after Dec. 24 of this year. The first jumbo MBS subject to risk-retention requirements is scheduled...
Issuers of MBS and ABS continue to address compliance issues with the Securities and Exchange Commission’s so-called Regulation AB2. Meanwhile, the Structured Finance Industry Group has urged the SEC to continue to delay further action on disclosure proposals that remain outstanding. In August 2014, the SEC published a final rule setting a variety of disclosure requirements for the structured finance market. Issuers of publicly registered MBS and ABS were required to comply with rules, forms and disclosures established by Reg AB2 by Nov. 23, 2015. Asset-level disclosure requirements will take effect Nov. 23 of this year. During a webinar hosted by the law firm of Mayer Brown late last week, Stuart Litwin, a partner at the law firm, said...
Goldman Sachs last week announced it has agreed to a $5.1 billion settlement, the largest regulatory penalty in the firm’s history, concluding an investigation brought by the Residential MBS Working Group of the U.S. Financial Fraud Enforcement Task Force. The agreement in principle is poised to resolve actual and potential civil claims by the U.S. Department of Justice, the New York and Illinois attorneys general, the National Credit Union Administration (as conservator for several failed credit unions) and the Federal Home Loan Banks of Chicago and Seattle. At issue are...
After the Federal Housing Finance Agency filed a motion in November to dismiss a case introduced by two GSE shareholders over the summer, the shareholders have opposed the motion to dismiss and are demanding a jury trial. The original complaint stated that with Fannie chartered under Delaware law and Freddie under Virginia’s jurisdiction, the preferred stock of a corporation cannot be given a cumulative dividend right equal to all the net worth of the corporation “in perpetuity.” In a nutshell, shareholders David Jacobs and Gary Hindes argue that the net worth sweep in which Treasury takes the bulk of the GSEs’ profits is illegal under state law.
Democrats and Republicans in Congress want to know what it will take to expand real estate investment trust participation in GSE credit risk transfers. They wrote the Securities and Exchange Commission last week asking it to help alleviate the regulatory challenges REITs face when it comes to participating in credit risk transfers. “Specifically, we are requesting your expertise in unlocking a meaningful amount of capital in the form of mortgage real estate investment trusts to participate in these transactions,” said the letter from the 13 congressman.They cited the FHFA’s goal to grow the credit risk-sharing program with an expanded investor base and said that mortgage REITs would be a likely candidate if the obstacles were removed.
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