Robert E. Story Jr., CMB, chairman of the Mortgage Bankers Association (MBA) issued the following comment, reacting to passage in the Senate of the Landrieu/Isakson and Crapo Amendments to S. 3217, the Restoring American Financial Stability Act of 2010. The Landrieu/Isakson Amendment requires regulators to establish a category of well-underwritten single family loans that would be exempt from the bill's risk retention requirements. The Crapo Amendment directs regulators to consider risk retention forms and requirements in order to ensure that regulators consider the unique nature of the Commercial Mortgage-Backed Securities (CMBS) market.
"Mortgage originators already have significant 'skin in the game' in the form of representations and warranties that they make to their investors. Mandating additional one-size-fits-all risk retention would have only further destabilized the already fragile real estate markets.
"We applaud passage of the Crapo Amendment which appropriately recognizes the unique nature of the Commercial Mortgage-backed securities (CMBS) market, provides flexibility with regard to the various forms of retained risk, furthers the goal of aligning interests across transactional parties and is a significant step toward restoring the CMBS markets.
"I want to thank Senators Dodd, Landrieu, Isakson, Hagan, Crapo and others for pushing these bipartisan measures through the Senate, and look forward to working with them and members on both sides of the aisle to ensure these provisions make it through conference."
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