The Securities and Exchange Commission (SEC) wants publicly traded depositories to provide "clear and transparent" disclosures on the impact mortgage buyback and foreclosure reviews will have on their bottom line in future quarters.
In a new letter, the SEC reminds chief financial officers that they are expected to disclose "any known trends or known demands" regarding obligations relating to representations and warranties that "you made in connection with your securitization activities and whole loan sales."
Registrants that have established reserves relating to their R&W obligations should consider providing "roll-forward" estimates of the reserve, according to the SEC senior assistant chief accountant.
The SEC letter was posted on the commission's Web site a few days ago. It applies to "upcoming Form 10-Qs and subsequent filings."
CFOs also are expected to "discuss any implications of any foreclosure review, including potential delays in completing foreclosures."
