The Securities and Exchange Commission (SEC) is seeking public feedback to improve rules governing residential mortgage-backed securities (RMBS) and some aspects of asset-backed securities (ABS).
The SEC notes that there have been no public RMBS offerings since 2013, yet they are key to a healthy mortgage market because they provide access to a wider range of issuers and investors. This, in turn, reduces reliance on any one source of liquidity and contributes to lower consumer costs.
The SEC is looking for feedback on whether there are SEC regulatory impediments contributing to the absence of public RMBS offerings, including whether certain disclosure requirements should be revised. They are also looking for input on how certain sensitive information about mortgage loans underlying the RMBS may be shared with investors in light of privacy and confidentiality concerns.
“Home ownership has long been the cornerstone of the American Dream. Yet, this dream remains out of reach for too many Americans today due, in part, to mortgage costs. A vibrant public market for RMBS can have downstream effects of reducing these costs and benefitting the U.S. housing sector,” SEC Chairman Paul Atkins said.
The SEC is also seeking comments on whether certain regulatory definitions should be revised, and whether revisions to any other ABS regulations should be considered to facilitate access to the public market.
“It is important for the Commission to hear from market participants on steps it can take to revive the public RMBS market,” Atkins added.
The SEC welcomes comments on any costs, burdens, or benefits that may result from possible regulatory responses related to the RMBS and ABS items identified in the release.
The public comment period will remain open for 60 days following publication in the Federal Register.