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Mortgage Industry Groups Provide Feedback on Universal Mortgage-Backed Security

first_img Governmental Measures Target Expanded Access to Affordable Housing 2 days ago  Print This Post Governmental Measures Target Expanded Access to Affordable Housing 2 days ago in Daily Dose, Featured, Government, News, Secondary Market The Best Markets For Residential Property Investors 2 days ago The Best Markets For Residential Property Investors 2 days ago Subscribe Share Save Home / Daily Dose / Mortgage Industry Groups Provide Feedback on Universal Mortgage-Backed Security FHFA Lending UMBS 2020-01-23 Seth Welborn Demand Propels Home Prices Upward 2 days ago Demand Propels Home Prices Upward 2 days ago Previous: The Industry Pulse: Updates on New Hires and Partnerships Next: Supreme Court Offers Ruling on Bankruptcy Appeals Case Data Provider Black Knight to Acquire Top of Mind 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Mortgage Industry Groups Provide Feedback on Universal Mortgage-Backed Security Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. The Week Ahead: Nearing the Forbearance Exit 2 days ago Mortgage-related trade organizations have begun to weigh in on Uniform Mortgage-Backed Security (UMBS) pooling practices, responding to a Request for Input (RFI) released by the Federal Housing Finance Agency (FHFA). In order to function properly, Fannie Mae and Freddie Mac state that the UMBS will require alignment between the GSE’s pools in order to work properly, and to address this, the Federal Housing Finance Agency (FHFA) released a request for input on a proposal to further align Fannie and Freddie’s pooling practices.In a statement at the launch of UMBS, Renee Schultz, SVP, Capital Markets, Fannie Mae said, “We remain focused on ensuring that all market participants continue to make a smooth transition to UMBS and maintaining a highly liquid housing finance market.”In their RFI responses, the Mortgage Bankers Association and the American Bankers Association (ABA) pointed to the to-be-announced (TBA) market and the single-lender pools.In their letter to the FHFA, ABA indicated that what is currently proposed for the TBA market should be reconsidered. According to ABA, “the approaches detailed in the RFI will not result in enhanced liquidity in the TBA market, will diminish the specified pool and CMO markets, and will cause harm to virtually every market participant, leading to higher costs or reduced access to credit that will ultimately impact mortgage borrowers.”ABA’s focus on the TBA market is an opinion shared by other organizations. In an Urban Institute report authored in part by former FHFA Special Advisor Bob Ryan, Ryan discusses how UMBS’s impact on the to-be-announced (TBA) market will be key to the security’s success.“Ideally, by combining Fannie and Freddie’s securities, the UMBS will expand the TBA market’s liquidity, thereby improving pricing marketwide,” Urban’s report stated. “But that will happen only if the combined securities are fungible. A material divergence in the performance of Fannie and Freddie’s pools will lead investors to trade more and more in the specified and stipulated pool markets, reducing liquidity in the TBA market and thereby undermining pricing marketwide.”MBA, meanwhile notes that the RFI’s proposed pooling process changes are not immediately clear, calling for more justification for what the organization calls “a major restructuring of a large market that is critically important to the health of broader financial markets and the global economy.”“Before FHFA moves forward on any elements of this proposal, MBA believes the Agency must provide a more thorough explanation of the problem it is seeking to address and a more robust justification for the merits of this particular solution,” the MBA’s letter said.In each response, avoiding misalignment between the GSEs is a priority. For MBA, this means aligning prepayment rates that will not have a potentially negative effect on pooling options, market diversity, and product availability to borrowers. ABA’s focus on alignment is centered on the TBA market, urging the FHFA to avoid taking actions that reduce the variety and optionality for investors and lenders that exists today in the TBA market.The complete letter from the ABA can be found here. The MBA’s letter can be found here. January 23, 2020 1,863 Views Servicers Navigate the Post-Pandemic World 2 days ago Tagged with: FHFA Lending UMBS About Author: Seth Welborn Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Related Articleslast_img read more

E-Courts: Can They Be The New Normal?

first_imgColumnsE-Courts: Can They Be The New Normal? Rahul Chitnis5 Jun 2020 7:39 AMShare This – xThe COVID-19 pandemic has thrust E-courts upon us, without giving anyone a chance to consider the advantages or disadvantages of E-courts. The term ‘E-courts’ in this article includes electronic filing of pleadings/documents, courts convening by video conferencing, advocates advancing arguments remotely and judges delivering judgments by video conferencing. The thinking today seems…Your free access to Live Law has expiredTo read the article, get a premium account.Your Subscription Supports Independent JournalismSubscription starts from ₹ 599+GST (For 6 Months)View PlansPremium account gives you:Unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments.Reading experience of Ad Free Version, Petition Copies, Judgement/Order Copies.Subscribe NowAlready a subscriber?LoginThe COVID-19 pandemic has thrust E-courts upon us, without giving anyone a chance to consider the advantages or disadvantages of E-courts. The term ‘E-courts’ in this article includes electronic filing of pleadings/documents, courts convening by video conferencing, advocates advancing arguments remotely and judges delivering judgments by video conferencing. The thinking today seems to be that ‘E-courts’ enhance the justice delivery system. But do E-courts really enhance the justice delivery system? The Justice Delivery System consists of different layers, from the outside to the inside, namely, (a) access, (b) engagement, (c) hearing, (d) analysis and (e) judgment. Let us consider how E-courts affect each of these layers, one at a time. Access E- filing of pleadings etc. vastly improves access to the Justice Delivery System because it makes it easy for the advocates/litigants to file pleadings, documents in courts from anywhere any time. Electronic filing also obviates the need of advocates/litigants physically travelling to the courts and instructing advocates at the place where the courts are situated. Digital documents reduce the costs of printing/photocopying and digitisation is environment friendly. Thus, digitisation through methods such as electronic filing, etc. vastly enhances ‘access’ (the outer layer) to the justice delivery system. However, at the present time, there are practical, infrastructure related issues that plague E-courts, which seriously hamper access to justice. These range from the complicated maze of software systems used today for virtual courts, low and fluctaing bandwidth of internet connections used by the advocates, the compatibility of devices used for accessing the services etc which make it extremely difficult for parties to engage in a meaningful manner. To elaborate, the Supreme Court uses ‘Vidyo’ software for VC ( virtual courts). The Delhi High Court uses ‘Cisco Webex’, the Bombay High Court initially used ‘Vidyo’, then ‘Zoom’and now using ‘Cisco Webex’ software (some judges of the Bombay High Court use ‘Microsoft Teams’ for VC). In the Bombay High Court, sometimes the Advocates are asked to change from one software to another during the course of the day. There is no method to check the security of the various softwares that are being used. Another aspect is that Vidyo software does not run on certain operating systems (like ‘Mac OS Catalina’). As on date, there is no integrated platform to conduct hearings in different courts, and this hampers greatly the functioning of the Justice Delivery System. Engagement The way the litigants engage with advocates and the courts (but not the judges) is another area which needs attention. Digitisation improves the engagement between litigants and advocates. Litigants are able to hold virtual conferences with their Advocates for drafting pleadings, preparing evidence, etc. and this reduces costs and increases efficiency. Also, the quality of pleadings is also improved as advocates are able to access precedents available on e-libraries. However, if one considers ‘recording evidence’ (which can be recorded by video conferencing) as part of engagement, then problems start to crop up. Firstly, when a witness deposes remotely, there is no way of knowing whether the witness is prompted, deposing without pressure, coercion or undue influence. It is also very difficult to exhibit documents, confront witnesses with documents, etc. during video conferencing. Also, it may be very difficult for courts/commissioners to record the demeanour of the witness. Justice Ravindra Bhat in a recent webinar ( organised by LiveLaw) has mentioned that the recording of evidence should not be left to Video Conferencing. Hearing The main stakeholders in the Justice Delivery System are (a) Judges, (b) Advocates (c) Litigants and (d) the Public. The ‘public’, however, as a stakeholder in the justice system, is a concept that needs greater elaboration. Legal systems in democracies have evolved to include ‘the public’ as an important check and balance. The role that they play is one of a critical observer. The exclusion of public from the administration of justice such as hearing, passing of open court orders, observations of the judges would generate lack the confidence and may give rise questions about the objectivity, impartiality and fairness. Subjecting to ‘public scrutiny’is an essential concomitant of judicial functions. The large number of PILs entertained and ‘suomotu’ proceedings initiated by the courts would show that there are several cases wherein the public is interested. They closely follow the hearings/orders passed in those matters, because the judgments in such cases affect them directly. Often, the decisions in these matters, shape government policies. Section 153B of Code of Civil Procedure mandates that the place of trial shall be deemed to be an ‘open court’ to which the public has access. It is the prerogative of the presiding judge to decide that a trial of any particular case may not be accessible to the public generally, such cases must be an exception.Similarly, Section 327 of the Code of Criminal Procedure provides that criminal courts generally, are deemed to be open courts to which the public have access. Only trials of offences relating to rape, etc.are required to be conducted in camera. Here too, proceedings are arean exception. Further, in the case of Naresh Shridhar Mirajkar v. State of Maharashtra, (1966) 3 SCR 744, a nine judge bench of the Supreme Court has laid down that all cases brought before the courts, whether civil, criminal, or others, must be heard in open court. As far back as 1966,the Supreme Court has upheld the concept of open courts as being vital to the process of justice. In fact, the Supreme Court states that the advantages of open courts are so significant that ‘there can be no two opinions’ on the matter. Though the digital courts were never envisaged then, the principle is still binding. Recently, in the case of Swapnil Tripathi v. Supreme Court of india, reported in (2018) 10 SCC 639, ( ‘the live streaming of court proceedings case’), a three-judge bench of the Supreme Court has said that the principle of open justice encompasses several aspects that are central to the fair administration of justice and the rule of law. Article 145(4) of the Constitution mandates that no judgment shall be delivered by the Supreme Court, save in open court. In Virtual Courts, the links are made available only to the Advocates appearing in that particular matter. In addition, some courts restrict the number of links that are forwarded to the advocates and litigants. The public has no access to the hearings. This also affects the several public interest litigations. Many court circulars say, recording of the hearing is strictly prohibited. Analysis Judges analyse pleadings to arrive at a just judgment. Advocates play a major role in helping Judges to analyse thelaw and facts based on precedents. There are many short comings in this process. While during the course of arguments many a times the arguing counsel face difficulties to refer to pleadings and documents without the assistance of a colleague, and this is not possible in the current scenario of Covid. Finally, there is much to evolve to create a ‘feeling’ of being part of a hearing when one participates in hearings conducted by video conferencing.The Advocates cannot ‘feel’ the reaction of the Judges to a particular point advanced by them or to a particular point of law being advanced by them.Video conferencing makes the hearing very ‘transactional’, when it should be a dialogue seeking the best possible outcome. This is applicable to the judges too. A critical aspect of justice is meaningful and thoughtful dialogue and analysis between lawyers and judges, while marshalling the best possible arguments and evidence. This requires ‘full bandwidth communication’ (and not communication limited to the bandwidth of the telecom provider) – something which is possible only in the physical presence of judges. Judgments Judgments are products of co-creation between Advocates and Judges. the judgments reflect the thought process of Judges and the arguments of the Advocates. Also, judgments evolve out of ‘reflective thinking’ between Advocates and Judges. ‘Reflective thinking’ by Judges is adversely affected in hearings conducted by video conferencing because the hearing itself is ‘transactional’. This in turn, is likely to adversely impact the quality of judgments. Therefore, E-Courts cannot be the new normal for ever. As the country opens up under a ‘new normal’ that consists of social distancing and protective attire amongst other measures, so too must courts resume open court hearings under this ‘new normal’. While some aspects of digitisation, carried out in a well thought out and uniform manner, such as e-filing, having hearings of procedural matters by video conferencing may benefit the justice delivery system in the long term, e-courts cannot substitute ‘normal’ courts without much preparation, because they may provide increased access to justice, but may in the final analysis, impact the quality of justice in our system.Views Are Personal Only (The Author is an Advocate practising in the Supreme Court of India and presently is the Chief Standing Counsel and Government Advocate for the State of Maharashtra in the Supreme Court of India) Next Storylast_img read more

Dutch unions take KLM to court over pension funding dispute

first_imgThe airline has been negotiating with the unions about a new pension plan, as it wants to switch from defined benefit arrangements to a collective defined contribution (CDC) scheme, with the company paying a fixed contribution for a number of years.The unions argue that KLM should compensate workers for the increased risk resulting from the new arrangements.The FD quoted Annette Groeneveld, chair of the VNC, as saying: “As things stand now, KLM would just pocket the money, and this would be very bad.”However, Erik Lutjens, professor of pensions law at Amsterdam’s Free University, suggested the unions might lose the case.“Whereas the Pensions Act prescribes that employers and employees conclude a pensions contract, the sponsor is to subsequently conclude a provision contract with an external party,” he said.“The contract for pensions provision is a matter between the employer and the pension fund. Workers are not stakeholders in this, in principle.”Employees have increasingly involved the courts in disputes over changes in contracts for pensions provision.Last December, the works council (OR) of insurer Aon lost its case against the employer, which, it claimed, had reneged on the pension agreement by changing the contract.APF, the Dutch pension fund of AkzoNobel, won a similar case.In other news, the Dutch Pensions Federation has published an updated version of its recommendations for reporting the costs of pensions provision.The industry organisation said the update provided “increased clarity, as well as auxiliary tools for comprehensiveness and comparability”.It said it clarified, among other things, the definitions of costs and calculation methods to increase uniformity, as well as how to deal with one-off costs and how costs as a consequence of tax could be reported.The Pensions Federation said pension funds would start reporting transaction costs in investment funds as of next year.These will include the costs of underlying funds at funds of funds, it added. The Association for Dutch Cabin Staff (VNC) and union FNV have launched legal proceedings against KLM in a dispute about plugging a funding gap at the company’s €2.6bn pension fund for cabin staff.Dutch financial news daily Het Financieele Dagblad (FD) reported that KLM refused to make €30m available.The amount had been demanded by the unions, as KLM claimed to have been relieved of mandatory payment obligations since the contract for pensions provision with the scheme was changed, according to the FD.It said the unions argued that KLM changed the contract without consulting or informing them.last_img read more