Mortgage servicers and their auditors are still grappling with the testing and reporting requirements of the Securities and Exchange Commission's new asset-backed securities (AB) regulation and the Mortgage Bankers Association is urging SEC to delay the initial reporting period.There is confusion about the role and responsibilities of ABS issuers, auditors, servicers and vendors in filing "Compliance with Applicable Servicing Criteria" reports (Item 1122) under the ABS regulation, according to the MBA, and more time is needed to resolve outstanding issues. "MBA believes that planning and performance of Item 1122 engagements under Regulation AB has been delayed for legitimate reasons that call for leniency in this initial reporting year," MBA says in a March 13 letter to SEC. While compliance testing should be conducted throughout 2006, MBA is recommending that non-compliance be reportable only if it is identified in the fourth quarter. SEC officials will be speaking at a Reg AB conference MBA is sponsoring April 10-11 in Washington.

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