ABS Proposal Is a Game Changer

The Securities and Exchange Commission's asset-backed securities proposal now out for comment should be at the top of the list of priorities for the mortgage industry and all stakeholders in the securitized market's future, according to Richard Dorfman, the former FHLB of Atlanta president who recently left to become the Securities Industry and Financial Markets Association's point person for securitization issues.

"The main priority that we're dealing with is that immense proposed regulation from the SEC that clearly is targeted at residential," he said.

Dorfman's new post extends beyond residential mortgages to bringing the whole of the securitized market back to its rightful place, but he indicates that mortgage collateral the market was founded on clearly plays a key role in that task.

"There has to be investor comfort not only with the assets inside the security but with the...security [itself]. I think that is a dual approach that is very important."

Dorfman stresses the need for a unified approach to efforts to reconstitute the securitized market.

"It is very important to attempt and to attain cohesion and a reasonable level of unity. Any originator, servicer, investor, etc., that lurches out on its own is not bound to make the maximum contribution to what we need to do."

He hopes SIFMA will continue its work with all the participants along the mortgage market's "conveyor belt" of services as well as the rest of the securitized market, addressing common causes they can throw their collective weight behind. When asked about some of the challenges facing securitized mortgages, he noted that market participants have been questioning whether some mortgage forms that have historically been used in the market are currently viable.

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