Following its white paper, the Obama Administration has proposed specific reforms to asset-backed securitization (ABS) markets designed to enhance market discipline and increase investor protection. Of most note would be a new risk-retention requirement that would force securitizers to place capital at risk unless regulators authorized exemptions. The bill would also remove longstanding exemptions from SEC registration requirements for mortgages securitized by banks to broad investor bases. The exemption for most originators for Ginnie Mae securitizations and for sale into the to-be-announced (TBA) market for Fannie Mae and Freddie Mac would also end.
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