On May 6, Treasury announced its intention to create a Federal Advisory Committee on Insurance to advise Treasury and the new Federal Insurance Office that will be established under the Dodd-Frank Act. The Director of the new committee will serve as a member of the Financial Stability Oversight Council. Applications for membership on the Committee must be submitted within 15 days after the date of publication in the Federal Registrar. Treasury Release. Notice of Establishment.
Treasury
Treasury Notice of Proposed Determination on Foreign Exchange Swaps and Forwards
On April 29, Treasury issued a notice of proposed determination exempting foreign exchange swaps and forwards from the definition of “swap” under the Commodities Exchange Act. The proposed determination does not extend to other foreign exchange derivatives including foreign exchange options, currency swaps, and non-deliverable forwards. Foreign exchange swaps and forwards will remain subject to the Dodd-Frank Act’s trade reporting requirements and business standards. Comments must be submitted within 30 days after publication in the Federal Register. Treasury Fact Sheet. Proposed Determination.
Making Home Affordable Supplemental Directive
On February 17, Treasury issued a Supplemental Directive under the Making Home Affordable Program which: (i) provides guidance relating to servicer internal quality assurance and (ii) revises guidance relating to the Dodd-Frank Certification and income verification. The Supplemental Directive will be effective on May 1. MHA Release. Supplemental Directive.
HAMP Reporting Updates
On November 9 and 10, HUD and Treasury issued HAMP reporting updates, which include revised reporting files, a new compensation matrix and revised data dictionaries and change logs. HAMP Release (Nov 9). HAMP Release (Nov 10).
Treasury Releases Report on TARP
On October 5, Treasury announced the release of a “Two-year Retrospective” report on TARP. The report provides an overview of the steps that Treasury took under TARP, which was created to recapitalize the financial sector and restart the credit markets. According to the report, in light of the recently announced AIG restructuring and when valued at current market prices, Treasury now estimates that the total cost of TARP will be about $50 billion. Treasury Release. TARP Report.
NY Fed Best Practices for Bond Trading
On September 14, the New York Fed’s Treasury Markets Practices Group released a report to serve as a guideline for controls and operations of market participants active in the wholesale Treasury, agency debt, and agency MBS markets. NY Fed Release.
Treasury and HUD Release Servicer Certification Guidance
On June 29, Treasury and HUD released Supplemental Directive 10-06: Guidance on Annual Servicer Certification Required by the “Servicer Participation Agreement” to provide additional guidance regarding the certification requirements and due dates for non-GSE servicers who have executed a Commitment to Purchase Financial Instrument and Servicer Participation Agreement under HAMP. Release. Supplemental Directive.
HAMP Supplemental Directive on Principal Forbearance
On June 4, Treasury released supplemental directive 10-05 under the HAMP program which sets forth (i) guidance on principal reduction and a principal reduction alternative, (ii) Treasury’s position regarding the applicability of the servicer safe harbor to residential loan modifications under HAMP, the Second Lien Modification Program and the Home Affordable Foreclosure Alternatives program, and (iii) Treasury’s position regarding the accounting treatment for HAMP modifications that include principal forbearance. Supplemental Directive. Principal Reduction Overview Alternative.
HAMP Supplemental Directive on Borrower Outreach
On March 24, Treasury issued a supplemental directive providing guidance to servicers of non-agency first lien mortgage loans for improving outreach to borrowers. The changes, effective June 1, include: (i) clarifying the requirement to proactively solicit borrowers with two or more due and unpaid payments for HAMP, (ii) prohibiting referral to foreclosure until a borrower is determined to be ineligible for HAMP or reasonable solicitation efforts have failed, (iii) requiring servicers to certify that borrowers are not HAMP-eligible and give borrowers 30 days to respond to a Non-Approval Notice before conducting a foreclosure sale, (iv) if requested, requiring servicers to consider borrowers in active bankruptcy for HAMP, and (v) clarifying the requirement that servicers use reasonable efforts to obtain approval from investors to participate in HAMP. Supplemental Directive.
Treasury Releases PPIP Report
On January 29, Treasury released the initial quarterly report for the Legacy Securities Public-Private Investment Program (PPIP) which includes a summary of capital activity, portfolio holdings and current pricing, and fund performance. As of December 31, 2009, approximately $4.3 billion of a total purchasing power of $24.8 billion had been invested in eligible assets and cash equivalents under the program. Treasury Release. Treasury Report.