The Securities and Exchange Commission last week cleared the way for Genworth Financial to separate its struggling mortgage insurance operations and create a new holding company structure that would shield the parent from any fallout from problems of its MI operations. The SEC granted Genworth’s request for a no-action letter, which ensures that no enforcement action would be taken based on Genworth’s interpretation of rules and regulations regarding mergers and succession, new registrant, obligations and indentures. Genworth announced...
In the first major change to loan originator test requirements since tests required by the Secure and Fair Enforcement for Mortgage Licensing Act were implemented in 2009, 20 state regulators adopted new LO tests this week. Industry participants applauded the uniformity among states, which will allow mortgage loan originators to satisfy testing requirements for multiple states in one swoop. Effective April 1, 20 states implemented uniform state content for the SAFE MLO test, five more states will adopt the test July 1 and two state agencies in Texas will adopt the test Oct. 1. MLOs seeking a license in the states will no longer be required to take a second, state-specific test component, according to the Conference of State Bank Supervisors. “This is...
The Treasury Market Practices Group announced last week that a margining recommendation for agency MBS initially set to be implemented in June will be delayed until the end of 2013. The provisions apply to primary dealers working with four broad categories of forward-settling agency MBS transactions as part of an effort to manage counterparty exposures. The implementation date was delayed in response to concerns from market participants. Timothy Cameron, managing director and head of the Securities Industry and Financial Markets Association’s asset management group, said buy-side participants need to negotiate agreements for each of their accounts, which can include thousands of documents. “It is clear many market participants will not be able...
The International Accounting Standards Board has proposed an accounting treatment that would force holders of all but the most senior tranche of an MBS to account for those assets at fair value through net income – something that has the Mortgage Bankers Association expressing concern. The MBA generally supports the introduction of fair value through an “other comprehensive income” (OCI) classification for financial assets held within a business model in which assets are managed both in order to collect contractual cash flows and for possible sale, according to James Gross, vice president of financial accounting and public policy for the trade group. However, the MBA has...
A white paper issued last week by the Securities Industry and Financial Markets Association recommends that a Securities and Exchange Commission mandated, but still nascent, automated securities monitoring system should and will eventually incorporate ABS and MBS products into its field of supervision. Last summer, the SEC approved a final rule requiring national securities exchanges, known as SROs, to establish a consolidated audit trail. The SEC rule requires securities exchanges and securities associations to submit to the SEC a plan to create a CAT system that will capture information regarding securities quotes and orders. In particular, the CAT system will have to track...
The Conference of State Bank Supervisors is calling upon the Consumer Financial Protection Bureau to adopt a petition process to define “rural” counties as the bureau prepares to implement balloon “qualified mortgage” and escrow requirements for rural lenders.
Twenty state regulators adopted uniform tests for mortgage loan originators on Monday, easing compliance for MLOs doing business in multiple states. State testing has been required since 2009 due to the Secure and Fair Enforcement for Mortgage Licensing Act.
The three-judge panel of the Ninth Circuit overturned a lower court’s ruling from last summer which determined the FHFA was not acting as conservator but as regulator when the agency halted GSE involvement with PACE programs.
The U.S. Supreme Court has denied a petition to review a federal appeals court decision to reinstate a securities class action lawsuit filed by MBS investors against Goldman Sachs. In denying the petition, the SCOTUS let stand a ruling by the U.S. Court of Appeals for the Second Circuit to overturn a lower court’s decision to dismiss the plaintiff’s suit for lack of standing and for failure to show injury.
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