The American Bankers Association is requesting that the Financial Accounting Standards Board postpone the Sept. 30, 2004 effective date for the EITF 03-1, due to accounting firm Deloitte & Touche's interpretation of its application. In a letter sent last week to both Robert Herz at FASB and Lawrence Smith at EITF, the ABA's Donna Fisher explains Deloitte's belief that EITF's requirement mean "any sale out of the available for sale' portfolio of a below-market security implies that management intends to sell similar securities in the AFS portfolio," and thus "all similar securities must be written down (permanently) through earnings."
"The accounting firm's interpretation of EITF 03-1 conflicts with SFAS 115, and, effectively, would result in new accounting for the AFS portfolio at lower of cost or market." Fisher writes. "We [The ABA] do not believe that this was the EITF's intent with Issue 03-1, because we believe such changes would require an amendment to SFAS 115."
Manufactured housing lender Origen Financial has hired five industry veterans from Chase Home Finance for its structured transactions, retail sales and business development groups. Don Scarmuzzi joins as a vice president in the structured transactions group; Jim Bramlage as senior vice president of sales; Kevin Brady as vice president of national broker and correspondent lending; Jerry Plumlee as vice president of business development in the West Region; and Wayne Carpenter as vice president of business development for the Mid-Atlantic and Northeast Regions.
Thomas Theobald was appointed last week to Ambac's board of directors. Theobold, currently a senior advisor at William Blair Capital Partners, is the former chief executive officer of Continental Bank Corp. Theobold also sits on the boards of Anixter International, Jones Lang LaSalle Inc. and Ventas, Inc. Theobald previously worked at Citicorp/Citibank for over 25 years in various capacities in the domestic and international sectors, including serving as vice chairman from 1982 to 1987.
BNP Paribas has hired Matthew Schultheis as head of fixed-income sales in its Chicago office, reporting to Vasan Varathan, head of investor coverage in the interest rate group. Schultheis had worked at Credit Suisse First Boston, where he had been since 1989, joining the firm following the merger with Donaldson, Lufkin & Jenrette.
Schulte Roth & Zabel LLP has hired Terrance O'Malley as a member of its Investment Management and Regulatory Group, focusing on regulatory issues, compliance matters and product development as it relates to the law firm's asset management clients. O'Malley has worked in the Enforcement Division at the Securities & Exchange Commission.
Nelnet announced last week that President Don Bouc will start his semi-retirement Dec. 31, and will assume the position of president emeritus on Jan.3, 2005. Bouc joined Nelnet in 1997, and was president from March 2001, and a member of the firm's board of directors since March 2000. Prior to this, he served as president of Nelnet subsidiary National Education Loan Network, Inc. Bouc also had a seven-year stint as president of the Nebraska Higher Education Loan Program, which Nelnet subsequently acquired in 1998. Bouc will retain his role in Nelnet's operational and strategic oversight, as a successor will not be appointed at this time.
The Mortgage Guaranty Insurance Corporation last week introduced a new mortgage insurance program, dubbed "SingleFile," aimed at high FICO borrowers. The lender-paid insurance is targeted to consumers who would typically take out a second, piggyback, mortgage to reduce the first lien loan-to-value ratio, allowing the borrower to take out just the first mortgage and thus lowering monthly payments.
Fitch Ratings will increase Libor spread to one- and six-month Libor as part of a continuing review of the stresses Fitch's U.S. residential MBS group uses to look at excess spread. This change applies to deals closing on or after Nov. 1. For deals the rating agency analyzes, incremental increases will be incorporated to the existing one- and six-month Libor rate. These changes will be included in the analysis for subprime, MBS, home equity, Alt-A, manufactured housing and net-interest margin transactions, which primarily use excess spread for loss protection or monetization.
Robert Toomey was appointed the principal staff advisor to The Bond Market Association's Funding Division. Toomey, also named vice president and assistant general counsel, reports to Eric L. Foster, managing staff advisor for TBMA's global rates and funding group. Most recently, Toomey was counsel and assistant vice president at the Federal Reserve Bank of New York, where he negotiated, structured and implemented the bank's markets group programs in tri-party repo and options on repo, among other responsibilities.
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