Ashley Halvorsen

Associate

Los Angeles


Read full biography at www.orrick.com

Ashley Halvorsen is an associate in the Structured Finance group in the Los Angeles office.

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Posts by: Ashley Halvorsen

Rating Agency Developments (April 23 – May 6)

 

On May 6, Fitch published its updated Future Flow Securitization Rating. Criteria.

On May 4, DBRS Morningstar published its updated Assessing U.S. RMBS Pools Under the Ability-to-Repay Rules. Methodology.

On May 1, Moody’s published its updated Tobacco Settlement Revenue Securitizations. Methodology.

On May 1, Moody’s published its updated US Tax Lien-Backed Securitizations. Methodology.

On April 28, KBRA published an article entitled Coronavirus (COVID-19): CMBS Special Servicing and Watchlist Trends. Report.

On April 27, DBRS Morningstar published an updated version of Rating and Monitoring Covered Bonds. Methodology.

On April 27, DBRS Morningstar published an updated version of Rating and Monitoring Covered Bonds Addendum: Market Value Spreads. Methodology.

On April 27, Moody’s published its updated Structured Settlement Securitizations. Methodology.

On April 24, Moody’s published its updated Non-Performing and Re-Performing Loan Securitizations. Methodology.

On April 23, Fitch published its updated Credit Card ABS Rating. Criteria.

On April 23, KBRA published an article entitled Coronavirus (COVID-19): Private Corporate Credit Market Poised for Resiliency. Report.

FHFA Extends Loan Processing Flexibilities for Fannie Mae and Freddie Mac Customers

 

On May 5, the Federal Housing Finance Agency (“FHFA”) extended loan origination flexibilities offered by Fannie Mae and Freddie Mac until at least June 30th. The extended flexibilities aim to help borrowers during the COVID-19 pandemic by facilitating loan closings and include: (1) alternative appraisals on purchase and rate term refinance loans; (2) alternative methods for verifying employment; and (3) expanding the use of power of attorney and remote online notarizations. Release.

Federal Bank Regulatory Agencies Modify Liquidity Coverage Ratio for Banks Participating in Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility

 

On May 5, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve, and the Office of the Comptroller of the Currency (“OCC”) announced an interim final rule to facilitate the flow of credit to households and businesses from banking organizations participating in the Federal Reserve’s Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility. The rule neutralizes the impact of the Liquidity Coverage Ratio rule associated with the funding provided by these facilities. Release. Rule.

Treasury Releases Final Regulations to Reform National Security Reviews for Certain Foreign Investments and Other Transactions in the United States

 

On January 13, the U.S. Department of the Treasury issued two final regulations that aim to modernize the investment review process to address national security issues posed by certain foreign investments and real estate transactions. The regulations implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and broaden the authority of the CFIUS to review even non-controlling foreign investments into U.S. businesses that are involved in critical technology, infrastructure, or personal data. Release.

Federal Bank Regulatory Agencies Issue Final Rule on Treatment of High Volatility Commercial Real Estate

 

On November 19, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) implemented a final rule addressing high volatility commercial real estate (HVCRE).  The rule aims to clarify the definition of HVCRE exposure and the treatment of credit facilities financing one- to four-family residential properties and land development. Banking institutions will have the option to maintain their current capital treatment for acquisition, development or construction loans originated between January 1, 2015 and the effective date of the final rule on April 1, 2020. FDIC ReleaseFRB ReleaseOCC Release.

Agencies Finalize Changes to Supplementary Leverage Ratio as Required by EGRRCPA

 

On November 19, the OCC, the FDIC and the FRB finalized changes that affect a capital requirement for banking organizations performing custodial activities under the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The EGRRCPA allows banking organizations performing custodial activities to exclude qualifying deposits at certain central banks from their supplementary leverage ratio, with the primary aim to fortify financial stability within the banking system. The rule will be effective on April 1, 2020. FDIC ReleaseFRB ReleaseOCC Release.

 

 

Federal Bank Regulatory Agencies Finalize Rule to Update Calculation of Counterparty Credit Risk for Derivative Contracts

 

On November 19, the OCC, the FDIC and the FRB published a final rule that implements a “standardized approach for measuring counterparty credit risk,” that banking organizations must follow with respect to derivative contracts. This methodology is intended to better reflect the current derivatives market. The final rule will be effective on April 1, 2020. FDIC ReleaseFRB ReleaseOCC Release.

 

SDNY Denies Royal Park’s Request to Sample in RMBS Trustee Suit

 

On November 18, Judge Gregory H. Woods of the Southern District of New York denied plaintiff investor Royal Park Investments SA/NV’s (Royal Park) motion to allow Royal Park to engage sampling experts to perform analyses on samples of loans to extrapolate information about the quality of those loans to all the loans in the trusts. Royal Park brought breach of contract, breach of the duty of trust, and violations of the Trust Indenture Act (TIA) claims against Bank of New York Mellon (BNYM) as trustee for loans included in five RMBS that allegedly breached the representations and warranties made in the governing agreements. Royal Park sought to use sampling to find a breach rate that Royal Park would argue that BNYM would have uncovered if it had reasonably investigated each trust at issue. Judge Woods found that Royal Park had not established, as a threshold matter, that BNYM had a duty to investigate the quality of the loans as a prudent trustee. Therefore, under FRCP 26, which limits discovery where “the burden or expense of the proposed discovery outweighs its likely benefit,” the extensive costs both parties would incur to perform sampling-related expert discovery was not proportional to the needs of the case. Though, unlike other decisions in lawsuits against RMBS trustees, this decision did not go so far as to conclude that Royal Park must prove its damages on a loan-by-loan basis. Rather, Judge Wood ruled that sampling would only be cost-effective if Royal Park proves BNYM had a duty to investigate the collateral and noted that because discovery is ongoing it may still put forth sufficient evidence to support its theory. Royal Park Decision.

CFPB Issues Interpretative Rule on Screening and Training Requirements for Mortgage Loan Originators

 

On November 15, the Consumer Financial Protection Bureau (CFPB) implemented an interpretive rule that clarifies that financial institutions that employ loan originators are not obligated to screen and train loan originators with temporary authority. Instead, the state is responsible for any necessary screening or training of these originators. The rule will be effective on November 24. CFPB Release.

SEC Adopts New Rules and Amendments under Title VII of Dodd-Frank

 

On September 19, the SEC adopted new rules and amendments under Title VII of the Dodd-Frank Act establishing recordkeeping and reporting requirements for security-based swap dealers and major security-based swap participants, and amending those requirements for broker-dealers.  The new rules aim to allow the SEC to better monitor compliance and reduce risk to the market. Release.