The way the new Basel III High Volatility Commercial Real Estate Lending Rule (HVCRE) was crafted, and is being enforced, is insane. We’ve written about this before. This is one of the purest examples of the regulatory apparatchik’s mule-headed refusal to look at data or engage with the banking establishment to develop thoughtful and effective rules. I think I saw a thoughtful and effective rule once.
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Three Important Structured Finance Court Decisions of 2015
The courts have been busy this year, handing down several key decisions which have affected the structured finance landscape. Among them are Omnicare, Ace Securities and Madden. In the grand tradition of the Golden Turkey Awards due out later this month (and without stealing any of their thunder), this post is a quick review of these important cases.
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The Regulatory State: May We Have A Little Humility, Please?
The Great Equity Correction of 2015 that is now being enjoyed by all of us is a correction, and not the beginning, of the Great Bear Market of 2015 (from my lips to God’s ears). It reminds me of just how little we know about how all complex systems, like the global financial market (and don’t get me started on climate), function. Nonetheless, our Regulatory State behaves as if this was not true and as if wise governmental types can simply declaim new rules and regulations to get their very specifically-designed outcomes.
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MERS: Better Than a Faster Horse
MERSCORP, Inc. (“MERS”) has been under fire for years. We wrote about it a while back when residential mortgage borrowers challenged the ability of MERS to foreclose on mortgages it held on the theory that MERS, as a mere nominee to the lender, was not a real party in interest. More recently, local recording offices have filed class action suits against MERS arguing that the MERS system prevented them from collecting fees supposedly required under state law. Now there’s a sympathetic plaintiff! In the past month, the Third Circuit and Fifth Circuit both rejected these arguments.
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Risk and Rewards of CRE-CLO and CLO Securitizations: Navigating the Capital Markets
More than 100 senior executives participated in Dechert’s Risk and Rewards of CRE-CLO and CLO Securitizations: Navigating the Capital Markets seminar. The half day event, supported by CRE Finance Council (CREFC) and the Loan Syndications and Trading Association (LSTA), focused on themes important to the CLO market and the CRE securitization market. Panelists addressed
Section 546(e) Protects Two Tiered Securitization Structures
What happens when a debtor, whose loan is pooled and securitized, files for bankruptcy? Are payments made to investors recoverable as fraudulent transfers or preferences?
Until recently, no published court opinion addressed this issue. However, in what is sure to be welcome news for investors in securitization vehicles, late last month, a Bankruptcy Court in
3rd Annual IMN Single Family Rental Investment Forum – 7 Thoughts on the State of the Single Family Rental Market
The 3rd Annual IMN Single Family Rental (SFR) Investment Forum was held at the Loews Hotel in Miami Beach last week. Over 1,000 SFR professionals attended the forum, including buyers, investors, lenders and service providers. The number and range of attendees at this year’s conference demonstrated significant enthusiasm for a growing and vibrant SFR industry.
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Three Top Considerations After Omnicare
In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 575 U. S. ____ (2015), the Supreme Court clarified issuer liability under §11 of the Securities Act. Section 11 provides that issuers are liable for registration statements that contain “an untrue statement of a material fact or omit to state a material fact required . . . to make the statements therein not misleading.” While the Court’s opinion applies in the context of publicly registered offerings, there are some important take-home messages for private placements too. Click through for three top considerations for issuers in light of Omnicare.
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ABS Las Vegas 2015
A securitization community coming off of record issuances in 2014 has entered the new year with a mixture of nerves and optimism. An estimated 6,500 finance professionals and attorneys converged for the 2015 ABS Las Vegas conference. The new risk retention rules, and their impact on CLOs in particular, were on everyone’s lips – to the point that one panel moderator opened his remarks by saying that he was narrowing the stated discussion topic to focus exclusively on CLO risk retention, at the urging of the panelists and audience.
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Securitization in the Sand – ABS East Turns Twenty
By: Daniel Wohlberg and Sean Solis
On Sunday, September 21st through Tuesday, September 23rd, almost 3,500 industry insiders descended upon Miami Beach for the 20th annual ABS East Conference at the acclaimed Fontainebleau Hotel. The enthusiasm and excitement was palpable considering the record setting year the market had so far, especially in the CLO space. The general tenor was cautious optimism as many believe the roaring market would continue for the next few years, but saving a bit of hesitation for some of the regulatory pitfalls up ahead. Most were comfortable, however, considering the market’s resilience in dealing with the recent implementation of the Volcker Rule.
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