Retained Interest

An Analysis of Structured Finance, Financial Assets and Related Topics

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Retained Interest

California’s AB913 Permits Securitization for Recovery of COVID-19 Electric Utility Undercollections

By J. Paul Forrester

September 10, 2020

In what we understand to be the first state law to do so, California’s Assembly Bill 913 (AB913), which was enrolled on September 4, 2020, amends Section 850 of the Public Utilities Code to allow electrical corporations to apply for a required financing order from the California Public Utility Commission (CPUC) to use securitization to recover verified incremental undercollections in calendar year 20201 through authorized fixed recovery charges. AB913 notes that securitization is a…

Retained Interest

Disclosure Technical Standards and Templates published in relation to the EU Securitisation Regulation

By Merryn Craske & Neil Macleod

September 9, 2020

On 3 September 2020, two regulations were published regarding the detailed disclosure requirements under the Securitisation Regulation (the “Disclosure Technical Standards“). These consist of regulatory technical standards concerning the information and the details of a securitisation to be made available (the “Disclosure RTS“), and implementing technical standards with regard to the standardised templates (the “Disclosure ITS“). The Disclosure Technical Standards will enter into force 20 days after publication, i.e. on 23 September 2020. Read the…

Retained Interest

Temporary Stay on Residential Evictions to Slow Spread of COVID-19 Reveals Unique Authority of CDC

By Steven M. Kaplan, Laurence E. Platt & Kelly Truesdale

September 4, 2020

On Tuesday, September 1, 2020, the US Centers for Disease Control and Prevention (the “CDC”) filed a notice of an agency order in the Federal Register titled Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19 (the “Order”), which the CDC published on Friday, September 4, 2020. The Order prohibits landlords, residential property owners, or other persons or entities with the legal right to pursue an eviction from exercising such right with…

Retained Interest

Second Circuit: Lehman Brothers “Flip Clause” Payments Are Protected Settlement Payments and Not Void as Ipso Facto Bankruptcy Provisions

By J. Paul Forrester

August 11, 2020

Almost 12 years after the commencement of the Lehman Brothers bankruptcy case, we now know the answer to one of that case’s most interesting questions—namely, whether so-called “flip clauses” are protected settlement payments or void as ipso facto bankruptcy provisions. On August 11, 2020, the US Court of Appeals for the Second Circuit (Court) issued a decision in the closely followed case of Lehman Brothers Special Financing Inc. v. Bank of America N.A., 18-1079, which…

Retained Interest

Ginnie Mae Restricts Long-Time Legitimate Business Activity of Mortgage Servicers

By Laurence E. Platt

July 11, 2020

Ginnie Mae’s newly imposed restriction on repooling of reperforming forborne loans yet again penalizes servicers acting as essential service providers in the continuing efforts to protect mortgagors facing financial hardship due to COVID-19. In issuing APM-20-07 on June 29, 2020, Ginnie Mae decided to further protect investors from the potential enhanced prepayment risk resulting from early pool buyouts of forborne loans. This protection, however, comes at the expense of servicers. By restricting servicers from relying on long-standing,…

Retained Interest

Recommendations for developing the EU securitisation market – Report by the High Level Forum on Capital Markets Union

By Merryn Craske, Neil Macleod, Robyn Llewellyn & Jaime Lad

July 1, 2020

A recent report, entitled “A New Vision for Europe’s Capital Markets” (the “Report”), sets out some key recommendations for how the EU securitisation market can be scaled up. The Report has been published by the High Level Forum on the Capital Markets Union (the “HLF”) which was established by the European Commission (the “Commission”). The recommendations cover some key areas of interest for market participants. Background Capital Markets Union has been an important part of…

Retained Interest

Volcker Rule Revision Complete: Easing the Compliance Burden for Banks

By Carol A. Hitselberger, Arthur S. Rublin, Ryan Suda & Sagi Tamir

June 28, 2020

On June 25, 2020, five federal financial regulatory agencies published the long awaited Final Revisions to the Volcker Rule (the “Final Revisions”) which revise certain aspects of the Volcker Rule (Section 13 of the Bank Holding Company Act) with respect to the identification and treatment of covered funds. The Final Revisions follow three years of the agencies’ consideration of changes to the Volcker Rule, originally prompted by the June 2017 Treasury Report that solicited changes…

Retained Interest

Federal Housing Agencies and GSEs Announce Updates to COVID-19 Relief Measures for Mortgage Loan Borrowers

By Krista Cooley, Kerri Webb & Daniel Pearson

June 22, 2020

In recent weeks, the US federal housing agencies and government-sponsored enterprises (GSEs) that insure, guarantee, or purchase “federally backed mortgage loans” covered by Section 4022 of the CARES Act (Act) have continued their intense pace of issuing temporary measures, and updates to such measures, intended to implement the Act’s provisions applicable to such loans. These actions aim to provide assistance to mortgage loan borrowers facing financial hardship in connection with the COVID-19 outbreak during and…

Retained Interest

CFPB Hatches a QM Proposal for GSE Patch

By Laurence E. Platt & Kris D. Kully

June 22, 2020

As rumored, the Consumer Financial Protection Bureau (“CFPB”) is proposing to revise its general qualified mortgage definition by adopting a loan pricing test. Specifically, under the proposal, a residential mortgage loan would not constitute a qualified mortgage (“QM”) if its annual percentage rate (“APR”) exceeds the average prime offer rate (“APOR”) by 200 or more basis points. The CFPB also proposes to eliminate its QM debt-to-income (“DTI”) threshold of 43%, recognizing that the ceiling may…

Retained Interest

Self-Employed Borrower’s Income – Is the Past Necessarily Prologue?

By Laurence E. Platt & Kris D. Kully

June 9, 2020

In a new era of double-digit unemployment resulting from the COVID-19 pandemic, it may be tough for a mortgage lender to predict the amount and stability of someone’s income in order to determine qualification for a home loan. Neither past nor even present levels of income may be reliable indicators of income levels going forward, at least in the short run or until the economic dislocations are substantially behind us. That is why Fannie Mae…

Retained Interest

An Analysis of Structured Finance, Financial Assets and Related Topics

Blog Authors

California’s AB913 Permits Securitization for Recovery of COVID-19 Electric Utility Undercollections

Disclosure Technical Standards and Templates published in relation to the EU Securitisation Regulation

Temporary Stay on Residential Evictions to Slow Spread of COVID-19 Reveals Unique Authority of CDC

Second Circuit: Lehman Brothers “Flip Clause” Payments Are Protected Settlement Payments and Not Void as Ipso Facto Bankruptcy Provisions

Ginnie Mae Restricts Long-Time Legitimate Business Activity of Mortgage Servicers

Recommendations for developing the EU securitisation market – Report by the High Level Forum on Capital Markets Union

Volcker Rule Revision Complete: Easing the Compliance Burden for Banks

Federal Housing Agencies and GSEs Announce Updates to COVID-19 Relief Measures for Mortgage Loan Borrowers

CFPB Hatches a QM Proposal for GSE Patch

Self-Employed Borrower’s Income – Is the Past Necessarily Prologue?

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