ASF
360 Madison Avenue
17th Floor
New York, NY
10017-7111
646.637.9211
George Miller
Executive Director
646.637.9216
Tom Deutsch
Associate Director
646.637.9235
Tere Petersen
Director, Events & Marketing
646.637.9236
Jooho Lee
Analyst
646.637.9259
Justin Ross
Analyst
646.637.9238
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© 2007 American Securitization Forum
June 7, 2007
Upcoming ASF Meetings & Events
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June 19: ASF Tax Subcommittee Meeting, 4-5:30 PM (ET)
Securitization-Related News and ASF Advocacy
ASF Announces Election of 2007-2008 Leadership: At its June 5 meeting, the ASF Board of Directors announced the election of the ASF 2007-2008 Board of Directors, Executive Officers, Committee and Subforum chairs and deputy chairs. The ASF Board of Directors also approved an amendment to the ASF by-laws to add one issuer or investor member to the ASF Board of Directors whose principal residence and business is outside of the US. We would like to congratulate the new members of the ASF leadership and thank the outgoing members for their service. Please click here for more information.
ASF Issues Position Paper on Subprime Mortgage Assignee Liability: On June 5, the ASF Board of Directors approved the release of a position paper presenting the ASF's policy views and recommendations on assignee liability as a potential policy response to certain perceived problems in connection with subprime mortgage financing activities. The paper concludes that expanding the liability faced by secondary market participants for abusive loan origination practices is a misguided policy, and risks a broad contraction in the availability of mortgage credit to subprime and other borrowers. The paper also sets forth detailed recommendations for a new, national framework for assignee liability in the secondary mortgage market. We would like to thank all of the ASF members who contributed to the development of this paper. Please click here for the paper and here for more information. Please contact George Miller with any questions.
ASF Issues Guidelines for Subprime Mortgage Loan Modifications: On June 5, the ASF Board of Directors approved the release of an ASF statement of principles, recommendations and guidelines for the modification of subprime residential mortgage loans that are included in a securitization. The statement was developed to provide practical guidance to servicers, and to establish a common framework for the structure and interpretation of loan modification provisions included in securitization governing documents, thereby promoting greater uniformity, clarity and certainty of application of these provisions throughout the industry. We would like to thank all of the ASF members who contributed to the development of this statement. Please click here for the statement and here for more information. Please contact George Miller with any questions.
FDIC Chairman Speaks on Subprime Lending at ASF Annual Meeting: FDIC Chairman Sheila Bair gave the keynote address at the ASF Annual Meeting on June 6, speaking on subprime lending and the secondary market and noting that "mortgage securitization has been a net positive for many middle- and lower-income communities, as well as the broader economy." She indicated that "we're making good progress in developing solutions that promote a stable secondary market, and that benefit most market participants and borrowers" and that the federal regulators hope to finalize "new guidelines for underwriting and marketing subprime mortgages" later this month. She "commend(ed) the ASF and the membership for developing principles and guidelines for modifying subprime loans" and noted that the ASF principles "recognize and support many of the key conclusions reached in our discussions with the industry." Please click here for the speech.
ASF Tax Subcommittee Initial Meeting: The ASF has formed a new Tax Subcommittee to address the many tax-related issues that impact the securitization industry. The Subcommittee will have its initial meeting on Tuesday, June 19 from 4-5:30 PM (ET). Agenda items include the consideration of a potential ASF comment letter to the Texas Comptroller regarding the implementation of the Texas margin tax and a discussion of REMIC and IRS rules related to residential mortgage loan modifications. Please contact Tom Deutsch with any questions.
ASF Dues Levels and Categories Amended: At its June 5 meeting, the ASF Board of Directors decided to maintain the current dues levels for ASF members for fiscal year 2008, with the following exceptions: ASF membership for investors will no longer be complimentary, a new category for CDO managers will be created and "hybrid" investor/issuers will be reexamined and categorized into an existing membership category according to their principal market function. Please click here for a complete list of the amendments, including pricing.
SEC Publishes Final Rules on Credit Rating Agency Oversight: On June 5, the SEC published final rules on credit rating agency oversight to implement provisions of the Credit Rating Agency Reform Act of 2006, enacted on September 29, 2006. The rules are designed to improve competition among nationally recognized statistical rating organizations (NRSROs) and prevent unfair, abusive and coercive practices in the industry. The rules detail the procedure for applying and registering as an NRSRO, recordkeeping requirements for NRSROs and requirements designed to protect NRSRO impartiality. The rule and form prescribing the process for a credit rating agency to apply for registration as an NRSRO will be effective upon publication of the final rules in the Federal Register, which is expected shortly. The remaining rules are effective on June 26, 2007. The SEC had issued proposed rules in February, 2007. The ASF submitted a comment letter on the proposed rules on March 22, 2007. Please click here for the final rules and here for the ASF comment letter.
House Committee to Hold Hearing on Consumer Protection: On June 13, the House Financial Services Committee will hold a hearing entitled, "Improving Federal Consumer Protection in Financial Services." The hearing will examine consumer protection in the financial services sector in light of regulatory and judicial decisions over the past several years that have preempted state consumer protection laws for federally chartered institutions, and thereby reduced the role of state officials in policymaking, complaint resolution and enforcement. The hearing will feature testimony from federal and state regulators. Please click here for more information.
Federal Reserve Chairman Speaks on Subprime Lending: On June 5, Federal Reserve Board Chairman Ben Bernanke spoke at the International Monetary Conference on the housing market and subprime lending, detailing present and future initiatives of the Board to respond to the issues in the market. He noted that "financial regulators have four types of tools to protect consumers and to promote safe and sound underwriting practices: required disclosures by lenders, rules to prohibit abusive or deceptive practices, principles-based guidance with supervisory oversight, and less-formal efforts to work with industry participants to promote best practices" and that the Board "is conducting a thorough review of its policies with respect to each of these instruments." He indicated that "we will be doing extensive consumer testing to evaluate the effectiveness of current and proposed disclosures required of all mortgage lenders" and that "we have also used, and will continue to use, supervisory guidance to help mitigate problems in nonprime lending." Please click here for the speech.
HUD Secretary Speaks on Homeownership and FHA Reform: On June 4, US Department of Housing and Urban Development (HUD) Secretary Alphonso Jackson gave a speech to the National Press Club on homeownership. He noted that the growth in the housing market has led to three issues: predatory lending, "the prevalence of exotic sub-prime loans" and "a loss of confidence by citizens and by some of our financial experts." He indicated that "we must have enough foresight to head-off future problems by acting now…One way to do this is through legislation to modernize the FHA." He also noted his belief that "if Congress allows us to set insurance premiums commensurate with risk," the FHA could assist thousands of borrowers. Please click here for the speech.
Federal Regulators Issue Illustrations of Consumer Information for Nontraditional Mortgage Products: On May 31, the federal bank, thrift, and credit union regulatory agencies issued final illustrations of consumer information intended to help institutions implement the consumer protection portion of the Interagency Guidance on Nontraditional Mortgage Product Risks that the agencies adopted October 4, 2006. The consumer protection portion sets forth recommended practices to ensure that consumers have clear and balanced information about nontraditional mortgages. The illustrations consist of a narrative explanation of nontraditional mortgage products, a chart comparing interest-only and payment option adjustable rate mortgages (ARMs) to a traditional fixed-rate loan, and a table that could be included with monthly statements for a payment option ARM showing the impact of various payment options on the loan balance. Institutions are not required to use the illustrations. Please click here for more information, including links to the illustrations.
House Subcommittee Holds Hearing on Credit Card Consumer Protection: The House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing this morning entitled, "Improving Credit Card Consumer Protection: Recent Industry and Regulatory Initiatives." The hearing featured testimony from federal regulators, including FDIC Chairman Sheila Bair and Comptroller of the Currency John Dugan, along with several industry participants. Please click here for a full witness list and prepared testimony.
Fitch Updates US RMBS and HEL ABS Criteria: On June 4, Fitch Ratings announced that it has amended its rating criteria for U.S. subprime RMBS/HEL ABS to better reflect the increased use of loan modifications as a loss mitigation tool in its rating opinions. Fitch's new rating criteria will reflect the risk of early overcollateralization (OC) release followed by high levels of borrower re-default, where such risk is deemed to be substantial. Analysis of various loss timing and cash flow scenarios will be incorporated into Fitch's rating opinions. Fitch's criteria will also consider any structural features within a securitization that may reduce the risk of OC release as a function of modification practices. The changes will be effective for transactions closing in August 2007. Please visit the Fitch Ratings website for more information.
Moody's Updates Subprime RMBS Ratings Analysis: On June 5, Moody's Investors Service announced that its analysis of securities backed by pools of subprime residential mortgages closing after July 1, 2007 will be expanded to include a systematic assessment of certain variables described in the Moody's report entitled, "Moody's Revised US Mortgage Loan-by-Loan Data Fields," published April 3, 2007. In addition, Moody's will be modifying the way it incorporates some other factors into its analysis. Please visit the Moody's website for more information.
Conferences/Events
ASF Securitization Institute Registration: Registration is now open for future offerings of the ASF Securitization Institute, the ASF's comprehensive training and education program on core securitization market topics and concepts taught by distinguished securitization market participants. The program will be offered in three two-day events: two introductory courses on securitization fundamentals in July, 2007 and October, 2007 and an advanced course on applied securitization in November, 2007. A comprehensive thirteen week evening course will be offered in spring, 2008. Please click here for more information, including links to register and a detailed curriculum. Register early, as seating is limited for all sessions.
ASF 2007 Annual Meeting Webinar Available: The ASF would like to thank all of the attendees who made the ASF 2007 Annual Meeting a success. The event, held on June 6 at the Grand Hyatt in New York, featured a full day of substantive programming and featured a keynote address by FDIC Chairman Sheila Bair. Audio files of all of the sessions are now available by webinar, along with accompanying presentations. Access to the webinar is complimentary for all ASF members and ASF 2007 Annual Meeting registrants. Please click here for more information on accessing the webinar.