SIFMA

New York Court of Appeals Requires Ambac to Follow Repurchase Protocol and Prove Elements of Fraud Claim

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On June 27, 2018, the New York Court of Appeals ruled that Ambac Assurance Corporation (“Ambac“) could not recover the full $2.2 billion in damages it sought in the form of claim payouts on $25 billion worth of securitized mortgages from Countrywide Home Loans, Inc. (“Countrywide“). Ambac, a monoline financial guaranty insurer, had agreed to insure payments of principal and interest owed to holders of 17 RMBS securitizations that had been sponsored by Countrywide. Ambac sued Countrywide, alleging claims for fraudulent inducement and breach of contractual representations and warranties. At summary judgment, Ambac contended that it was not required to prove justifiable reliance or loss causation for the fraudulent inducement claim, and that the contract’s repurchase protocol—specified to be the sole remedy for breaches of representations and warranties—did not govern its contractual claims. READ MORE →

ISDA, AFME, ICMA, SIFMA and SIFMA AMG Publish Global Benchmark Report

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The International Swaps and Derivatives Association (“ISDA“), the Association of Financial Markets in Europe (“AFME“), International Capital Market Association (“ICMA“) and the Securities Industry and Financial Markets Association (“SIFMA“) and its asset management group (SIFMA AMG) have published a new report that assesses the issues involved with benchmark reform, and makes recommendations on steps firms can take to prepare for the transition from interbank offered rates (“IBORs“) to alternative risk-free rates (“RFRs“). Click here to read the full report.

SIFMA Sends Comment Letters to FHFA on Credit Risk Transfer

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SIFMA, along with the Association of Mortgage Investors and the National Association of Real Estate Investment Trusts, and separately along with the ABA, AMI, HPC, MBA, and SFIG, submitted comment letters to the FHFA in response to the FHFA request for comments on the GSEs credit risk transfer programs, particularly with respect to exploration of more “front end” risk transfer options that share risk with the private sector before, or concurrently with, the purchase of loans by the GSEs. SIFMA, AMI, NAREIT Comment Letter Joint Trades Comment Letter.

SIFMA’s 2013 Securitization Conference

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On December 6, SIFMA will host its 2013 Securitization Outlook Conference in New York City, which is set to be a timely and informative conference that will bring together a group of academic and industry leaders to discuss:

  • FHFA’s strategic plan, single securitization platform and the near-term outlook for the GSEs
  • The status of eminent domain for mortgage loans
  • The regulatory and marker outlook for private-label securitization markets

Orrick partner Howard Altarescu will participate in the panel discussion. For more information, please click here.

SIFMA Statement on Eminent Domain and TBA Trading

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On July 19, SIFMA announced a new policy that mortgage loans to borrowers residing in jurisdictions that have initiated condemnation proceedings to seize mortgage loans through eminent domain will not be deliverable into TBA-eligible securities on a going-forward basis. SIFMA stated that mortgage loans in areas where these eminent domain powers could be exercised would exhibit unpredictable prepayment behavior and destroy the homogeneity among mortgage loans necessary for the proper functioning of the TBA market. In the event that seizures of mortgage loans occur, SIFMA plans to review the facts and circumstances of the situation periodically and will review its policy in light of any changes. Statement.

Emergency Economic Stabilization Act Developments

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Agreements were signed over the past weekend with the initial nine institutions electing to participate in Treasury’s Capital Purchase Program.  Treasury began delivering $125 billion in capital to those institutions on October 28.  A number of regional banks have also applied to receive approximately $35 billion in capital under the program.  CPP Transaction Report.  Treasury Press Release. 

On October 28, SIFMA and ASF jointly issued a comment letter relating to the development of the asset guarantee program authorized under the Emergency Economic Stabilization Act and requested that Treasury consider limiting and targeting the circumstances in which the guarantee program might be effectively used.  SIFMA/ASF Comment Letter. 

Internal Revenue Code Sec. 597 provides for rules to prevent a double tax benefit on the receipt by a bank or S&L of “federal financial assistance” pursuant to section 406(f) of the National Housing Act, section 21A of the Federal Home Loan Bank Act or section 11(f) or 13(c) of the Federal Deposit Insurance Act.  On October 14, the IRS announced that amounts furnished to financial institutions under TARP will not be treated as “federal financial assistance” within the meaning of Sec. 597.  IRS Notice 2008-101.