Financial Technology™ Unlimited Possibilities
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8.5” wide | Page 4 | BACK 8.5” wide | Page 1 | FRONT (fold) Financial Technology™ Unlimited possibilities Financial Technology™ www.deloitte.com/financialtechnology Copyright © 2016 Deloitte Development LLC. All rights reserved. Software solutions for financial institutions 8.5” wide | Page 4 | BACK 8.5” wide | Page 1 | FRONT (fold) 8.5” wide | Page 2 | Inside front 8.5” wide | Page 3 | Inside back (fold) Comprehensive, scalable solutions Broad market coverage, deep Our solutions help address the asset class specialization operational, regulatory, risk Our products and services are management, security, accounting, available for various markets, including: reporting, and audit requirements of • Banking and • Insurance the clients we serve. credit union • Private equity • Covered bond • Real estate More than 25 years of experience • Hedge fund • Securitization For almost three decades, our solutions have been used by banks, asset managers, issuers, investors, Flexible approach and administrators. We offer a variety of licensing options, hosted solutions, services and flexible integration options. Industry knowledgeable professionals Our dedicated team focuses on For more information about Deloitte’s financial institution business All items noted with the ™ symbol in this document are trademarks of Deloitte Development LLC, a subsidiary of Deloitte LLP. Financial Technology™ products and process, consulting, and software This document contains general information only and Deloitte is not, by means of this document, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This document is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that development and implementation. services, please visit: may affect your business, you should consult a qualified professional advisor. www.deloitte.com/financialtechnology Deloitte shall not be responsible for any loss sustained by any person who relies on this document. 8.5” wide | Page 2 | Inside front 8.5” wide | Page 3 | Inside back (fold) www.asreport.com | @asreport Common Platform Fannie and Freddie are making big changes in the way they securitize and transfer risk Jan/Feb 2017 | Volume 17, Number 1 WILMINGTON TRUST RENOWNED EXPERIENCE | STRUCTURED FINANCE RICK D’EMILIA PATRICIA EVANS PATRICK TADIE [email protected] [email protected] [email protected] 212-941-4414 302-636-6104 212-941-4407 Experience is the best partner for structured finance. At Wilmington Trust, we’ve been working with issuers since the inception of the mortgage securitization market, and our team has deep experience as a full-service trustee for all asset classes in the securitization marketplace. We serve clients across the country and around the world, providing the trustee and administrative services required for ABS/MBS transactions. For more insight on how we’ve successfully served clients on structured nance deals, contact one of our renowned professionals or visit wilmingtontrust.com/structurednance. INDENTURE TRUSTEE | PAYING AGENT | BACKUP SERVICING | DOCUMENT CUSTODY INDEPENDENT DIRECTOR | OWNER TRUSTEE | TAX & ACCOUNTING Wilmington Trust is a registered service mark. Wilmington Trust Corporation is a wholly owned subsidiary of M&T Bank Corporation. ©2017 Wilmington Trust Corporation and its affiliates. All rights reserved. 14500 ASSET SECURITIZATION REPORT & ASSET BACKED ALERTS | CMYK | TRIM: 8.5 X 11” | LIVE: 7 X 10 Common Platform Fannie and Freddie are making big changes CONTENTS in the way they securitize and transfer risk 12 C O M M O N PLATFORM Fannie and Freddie are making big changes in the way they securitize and transfer risk ABS .MBS OBSERVATION 18 Risk Retention, Not Rule 15 7 CRT Alone Is Not Enough Risk-Based Capital While 5% is “overkill” this CLO Credit risk transfer has come These deals offloading credit manager sees merit in aligning under sharp criticism, but it has losses to private investors cannot interests with investors. big fans on Wall Street. replace core capital. 20 LSTA to Appeal 17 Ginnie Goes Easy 8 GSE Recap Is a Sideshow A Federal Circuit Court shot The housing agency wants to dis- The impact on the housing market pel concerns that may be making down its 2016 lawsuit against risk could be quite negative, and it’s it hard to finance mortgage ser- retention for CLOs, but the trade just not worth the risk. vicing rights. 9 No, It’s the Main Event group is undeterred. 21 Student Debt for Seniors If Fannie and Freddie are com- GLOBAL pelled to scale back, big banks will Increasingly, the burden of 23 dominate the housing market. paying for higher education is Euro CLOs Resets Rising 10 Subprime Auto to Worsen falling on older Americans. Still More Auto Lenders Credit enhancement can only so 22 much to offset mounting losses; Community Banks are latest eventually bondholders will suffer. entrants in this overheated mar- ket, though they steer clear of subprime. Reproduction or electronic forwarding of this productis a violation of federal copyright law! Site licenses are available — please call Customer Service 212.803.8500 or [email protected] Subscription Information: [email protected] | 212.803.8500; Bulk subscription| US/Canada $2,995 | Annual Rate (8 issues) International $2,995 Asset Securitization Report - (ISSN # 1547-3422) Vol. 17, No. 1, is published 8 times a year by SourceMedia, One State Street Plaza, 27th Floor, New York, NY 10004. Postmaster: Send address changes to Asset Securitization Report, SourceMedia, One State Street Plaza, New York, NY 10004. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. All rights reserved. Photocopy permission is available solely through SourceMedia, One State Street Plaza, 27th Floor, New York, NY 10004. For more information about reprints and licensing content from Asset Securitization Report, please visit www.SourceMediaReprints.com or contact PARS International Corp. (212) 221-9595. Asset Securitization Report is a general- circulation publication. No data herein is or should be construed to be a recommendation for the purchase, retention or sale of securities, or to provide investment advice of the companies mentioned or advertised. SourceMedia, its subsidiaries and its employees may, from time to time, purchase, own, or sell securities or other investment products of the companies discussed or advertised in this publication. ©2017 Asset Securitization Report and SourceMedia, Inc. All rights reserved. January / February 2017 Asset Securitization Report 3 One State Street Plaza, 27th Floor, New York, NY 10004 Editorial Editor in Chief: Allison Bisbey [email protected]; 212.803.8271 Senior Editor: Glen Fest [email protected]; 817.847.8041 Associate Art Director: Neesha Haughton [email protected]; 212.803.8815 Contributors Jacob Passy, Bonnie Sinnock, Allison Prang Group Editorial Director, Banking & Capital Markets Richard Melville [email protected]; 212.803.8679 VP, Content Operations and Creative Services: Paul Vogel [email protected]; 212.803.8832 Director of Creative Operations: Michael Chu [email protected]; 212.803.8313 Director of Content Operations: Theresa Hambel [email protected]; 212-803-8245 Publishing VP Capital Markets Division: Harry Nikpour 212.803.8638 Vice President of Sales, Banking & Payments: Dennis Strong 212.803.8372 Associate Publisher: Louis Fugazy 212.803.8773 Marketing Marketing Manager: Raquel J. Lucas 212.803.8322 Chief Executive Officer: Douglas J. Manoni Chief Financial Officer: Michael P. Caruso Chief Revenue Officer: Marianne Collins EVP and Chief Content Officer: David Longobardi Chief Marketing and Digital Officer: Minna Rhee SVP, Conferences: John DelMauro SVP, Human Resources: Ying Wong 4 Asset Securitization Report January / February 2017 EDITOR’S LETTER House in Order For years, it has been difficult to get housing finance reform off the back burner. Now the call by President-elect Donald Trump’s pick for Treasury secretary, Donald Mnuchin, to privatize the two government-sponsored enterprises puts the issue front and center, even if his plans clash with those of prominent Republican lawmakers As the GOP bale looms, two common platforms are being developed will inevitably play a big role in the outcome, whatever it is. Think of them as the plumbing and electric of housing finance. The first is the Common Securitization Platform, a new infrastructure that will eventually allow Fannie Mae and Freddie Mac to issue a single mortgage-backed security. As Jacob Passy of sister publication National Mortgage News explains, an upgrade to the deteriorating platforms the GSEs have been using was long overdue. It will also eliminate a discrepancy in secondary market pricing between mortgage bonds issued by Fannie and Freddie. But the new soware could also be adapted for use by in private-label securitization. This would make it more feasible to privatize the mortgage giants; the CSP could become a sort of financial utility. Likewise, securities that Fannie and Freddie have been developing for the past several years to transfer mortgage credit risk to the capital markets also have a role to play in the future of housing finance. The scope of this role is a maer of debate, however. In