Federal Deposit Insurance Corp. Martin Gruenberg nomination. The Senate Banking, Housing and Urban Affairs Committee considered the nomination of Martin Gruenberg to be the chairman and a member of the Board of Directors of the Federal Deposit Insurance Corp. on Tuesday, July 26. A vote on his nomination has yet to be scheduled. Federal Housing Finance Agency. Suit against UBS, related defendants. The Federal Housing Finance Agency has sued UBS Americas, Inc., and related defendants in federal district court alleging violations of federal securities laws in the sale of residential non-agency mortgage-backed securities to Fannie Mae and Freddie Mac. ...

MBS and ABS investors would have an easier time organizing to press deal sponsors to address potential problems under a revised proposed rule on shelf registration that was approved by the Securities and Exchange Commission this week. The agency made several major changes to its proposed overhaul of shelf eligibility requirements that was aired back in 2010 and put the revised package out for public comment. Most of the changes reflect public comment on the original proposal as well as the passage of the Dodd-Frank Act. Under the latest proposal, MBS and ABS issuers would be required to ...

Trustees of residential MBS should consider themselves “on notice” that they need to be much more attentive and aggressive in meeting their obligations under the pooling and servicing agreements governing MBS trusts, according to a trade group representing investors. Last week, the Association of Mortgage Investors sent letters to several major MBS trustees – including JPMorgan Chase, Deutsche Bank, US Bank, Wells Fargo and Bank of New York – remind-ing them of their legal obligations to RMBS certificate holders. The AMI letter also informed trustees that ...

The Federal Reserve’s proposed rulemaking that would establish the “qualified mortgage” as a standard for complying with the ability-to-repay requirement under the Dodd-Frank Act would create a number of significant legal liabilities that will threaten buyers of MBS, Wall Street groups said. The American Securitization Forum emphasized that questions about the lack of objective criteria in the proposal for determining whether a loan is a QM, and how little legal certainty the final rulemaking would actually provide, become of “critical importance when ...

Credit rating agencies and government regulators are making wholesale changes to the way they come up with and use credit ratings in order to prevent a repeat of the financial meltdown, witnesses at a hearing of the House Committee on Financial Services said. “While much has changed with regard to credit ratings and credit rating agencies over the course of the past several years, our fundamental mission remains the same: to provide the market with independent benchmarks about the creditworthiness of ...

The government program that came out of the Troubled Asset Relief Plan to provide liquidity for the non-agency MBS market by partnering with private investors was less profitable during the second quarter, according to a Treasury Department report released last week. The Public-Private Investment Program was created to invest in non-agency MBS that other banks couldn’t hold after the economic collapse. Non-agency MBS account for 79 percent of the assets acquired by the eight public-private investment funds, with commercial MBS making up the rest. Almost half of the MBS are ...

The Securities and Exchange Commission last week released a report on its many proposed rules relating to credit ratings, several of which pertain to asset-backed securities, as an update regarding its heavily-laden plate of rule changes that must eventually be adopted and implemented. When the Dodd-Frank Act became law, a new provision came with it in the Exchange Act, which required the SEC to collaborate with other regulators to “jointly prescribe” rules regarding mandatory credit risk retention in ABS offerings. These hotly-debated rules were proposed in ...

The Consumer Financial Protection Bureau issued an interim final rule last week that the new federal regulator said prevented significant disruption of the origination and modification of alternative mortgages – including ARMs. However, the interim final rule also narrowed the definition of “alternative mortgage transactions” that are eligible for preemption from state laws. The interim final rule temporarily updated the Alternative Mortgage Transaction Parity Act as required by the Dodd-Frank Act. “Without this interim rule implementing the AMTPA amendments, state lenders would lose ...

Lenders and even consumer advocates are pushing for expansions to proposed streamlined refinance standards for “qualified mortgages.” Federal regulators proposed an exception to the QM ability-to-repay requirements for refis of “non-standard mortgages” into standard mortgages. “MBA urges the CFPB to revisit these criteria so more borrowers qualify for streamlined products and such products are treated as QMs,” the Mortgage Bankers Association said in a comment letter sent to the Federal Reserve. The comment period on the proposed rule ...

The Federal Reserve last week fined Wells Fargo & Co. $85.0 million, alleging that a non-bank subsidiary of Wells steered prime borrowers to subprime mortgages. The consent order is the first formal enforcement action taken by a federal bank regulatory agency to address alleged steering of borrowers into high-cost subprime mortgages. The civil money penalty is also the largest the Fed has assessed in a consumer-protection enforcement action. In addition to the civil money penalty, the order requires that Wells compensate more than ...