Release Date: August 8, 2012
Contact:
Katrina Cavalli, 212.313.1181, kcavalli@sifma.org
Andrew DeSouza, 202.962.7390, adesouza@sifma.org
SIFMA Shares FHFA Concerns with Use of Eminent Domain
to Restructure Mortgages
Washington, D.C., August 8, 2012—SIFMA today released the following statement from Kenneth E. Bentsen, Jr., executive vice president for public policy and advocacy, after the Federal Housing Finance Agency (FHFA) released a notice for comment on the proposed use of eminent domain to modify existing mortgages in private label security pools.
“We commend the FHFA for recognizing the serious concerns market participants have voiced over the proposed use of eminent domain to seize mortgage notes and restructure them. SIFMA believes that this plan would likely significantly harm mortgage finance markets and reduce access to credit for mortgage borrowers. This proposal also raises serious legal and constitutional issues. From a market perspective, if performing mortgage loans are taken from their holders, this will cause significant losses which will be borne by the pension plans and individual citizens who are invested in the securities. The use of eminent domain will do more harm than good, and the worst harm will be felt by future borrowers who will inevitably pay higher rates for home mortgages. SIFMA remains firmly opposed to this idea and will share its concerns in detail with the FHFA in the coming month.”
FHFA request for comment: http://www.fhfa.gov/webfiles/24143/EminentdomainPR8812F.pdf
O’Melveny & Myers legal memo:
http://www.sifma.org/news/news.aspx?id=8589939514
Testimony before San Bernardino Joint Exercise Powers Authority:
http://www.sifma.org/news/news.aspx?id=8589939462
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The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
