OnPoint

Subscribe to OnPoint

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…

A bill was recently introduced in the Senate that could result in the wind-down of Fannie Mae and Freddie Mac. Under the bi-partisan “Housing Finance Reform and Taxpayer Protection Act of 2013”, recently introduced by Senators Bob Corker (R-TN) and Mark Warner (D-VA), Fannie Mae and Freddie Mac would be replaced by a new agency, the Federal Mortgage Insurance Corporation (the “FMIC”), tasked with operating a Mortgage Insurance Fund to provide a limited, government-backed guarantee on qualifying, privately issued mortgaged-back securitizations.Continue Reading Dechert OnPoint: Residential Mortgage Securitization Update: GSE Reform Bill

The Miami Heat’s home playoff games are not going to be the only events drawing attention to sunny Miami next week as IMN hosts its annual REO-to-Rental Forum in Miami. As we have previously discussed numerous times (here, here and here, and OnPoint Updates here and here), the REO-to-Rental asset class has become quite a hot topic and this conference is sure to provide invaluable insight into current trends in the market, as well as where market participants see this class of assets going over the near- and far-term.Continue Reading IMN’s REO-to-Rental Forum 2013: Welcome to Miami

A recent decision out of the Bankruptcy Court for the Northern District of New York has brought greater certainty to the interpretation of what qualifies as an “interest” when determining the scope of a Section 363(f) “free and clear” sale in bankruptcy. The decision in In re Tougher Industries, Inc. became the latest in…

February has certainly been a big month for federal agencies to issue long-awaited final rules. The latest agency to throw its hat into the ring is the U.S. Department of Housing and Urban Development, which recently codified its long standing position that liability under the Fair Housing Act may be proven by disparate impact without any discriminatory intentions.  This final rule provides additional support to potential government and private plaintiffs seeking to challenge “facially neutral” practices as violations of the Fair Housing Act.  We have previously blogged about the different types of liability related to discrimination in lending here.  This rulemaking comes at a time when lenders have already begun to reexamine how they will structure their residential mortgage lending activities in the face of the CFPB’s new qualified mortgage rules.  (See our DechertOnPoints for more information on the new QM/ATR rule and the additional proposal).Continue Reading HUD’s Final Rule on Fair Housing Act Liability Explained in New Dechert OnPoint

While we’re on the topic of Dodd-Frank rules and regs that could have a significant impact on the securitization market, the SEC recently reported the findings of a study it conducted regarding assigned credit ratings for structured finance products – a report required under Section 939F of the Dodd-Frank Act that will subsequently lead to new rulemaking. Continue Reading Dechert OnPoint Details Recent SEC Report on Credit Ratings for Structured Finance Products

Dechert’s securitization team is looking forward to the American Securitization Forum 2013 (“ASF 2013”) conference starting this Sunday, as it is expected to be once again the largest capital markets conference in the world. ASF 2013 is expecting over 4,500 participants who will all convene at the Aria Hotel and Convention Center in fabulous Las Vegas.Continue Reading ASF 2013 (“Viva Las Vegas”)

Yesterday, Moody’s issued a Sector Comment expressing concerns with respect to proposed REO-To-Rental deals structured to utilize a collateral package comprised of equity-pledges in the SPV property owners in lieu of individual mortgage liens. Moody’s indicated that such equity-pledge structures may need to have strong third-party oversight (including regular monitoring of the ownership of individual assets) and strong financial sponsorship to achieve the agency’s Baa rating. Issuers were hoping to use such structures as an answer to high transaction costs present in deals comprised of large numbers of low-value individual properties.Continue Reading REO-To-Rental Update: Moody’s Issues Guidance on Structuring Risks

One of this year’s most discussed investment ideas is the conversion of distressed or foreclosed single family homes into rental properties on a mass scale.  With the FHFA’s Real Estate Owned Initiative offering product in bulk sales and major institutions stepping up to develop programs to finance the acquisition of the pools, REO-to-Rental strategies are …

Last Thursday, the U.S. Commodity Futures Trading Commission (“CFTC”) responded to ASF’s and SIFMA’s requests for relief from the new CFTC rules which implemented certain Dodd-Frank amendments that brought swaps within the purview of the CFTC.  The new rules, which took effect on October 12, 2012, threatened to regulate many securitization vehicles as commodity pools even though these vehicles typically only use swaps for hedging or risk management purposes.  The crux of the issue, and possibly the unintended consequence of the new CFTC rules, is that, without relief, sponsors and advisors (such as depositors, trustees, collateral managers and servicers) would be subject to CFTC registration and regulation as commodity pool operators and/or commodity trading advisors. Continue Reading Unintended Consequences Avoided? CFTC Provides Relief for Certain Securitization Vehicles