ASF Senate Banking TestimonyDecember 1, 2010Page 2Chairman Dodd, Ranking Member Shelby, Members of the Committee, my name is TomDeutsch and as the Executive Director of the American Securitization Forum, I appreciate theopportunity to testify here today on behalf of the 330 ASF member institutions who originate thecollateral, structure the transactions, serve as trustees, trade the bonds, service the loans andinvest the capital in the preponderance of residential mortgage- and asset-backed securities(“RMBS”) and (“ABS”) in the United States, including those backed entirely by private capitalas well as those guaranteed by Ginnie Mae and the government sponsored enterprises (“GSEsIn this testimony, we seek first to highlight some of the key aspects of securitization aswell as its importance to the U.S. and global economy. Subsequently, we seek to address theconcerns raised by a few commentators that the banking and housing markets may be subject toadditional systemic risk because securitization trusts may not actually own the trillions of dollarsof mortgages that are supposed to be contained within those trusts. In addition to introducing thewhite paper that ASF issued two weeks ago, we also examine a number of the new concerns thathave been raised since the introduction of that white paper. In particular, we discuss and providedetailed background for four key components of valid loan transfers, including:”)such as Fannie Mae and Freddie Mac.A.
PSAs meet the requirement for a “complete” or “unbroken” chain of indorsement
securitization trusts comply with New York trust law;;C.
RMBS trusts effectively achieve REMIC status; andD.
mistakes do not affect validity of transfer.
Note that the Uniform Commercial Code replaces the more common U.S. spelling of “endorsement” for the lesscommon “indorsement.” The UCC spelling is used throughout this testimony for consistency.