home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.


Bankers Blast FASB Fair Value Guidance

ABA letter to SEC calls for override

October 13, 2008

By MortgageDaily.com staff


The nation's bankers are calling on the Securities and Exchange Commission override a recent accounting pronouncement on mark-to-market accounting.

A letter from the American Bankers Association today to SEC Chairman Christopher Cox requests that the regulator override a staff position on FAS Statement No. 157 issued by the Financial Accounting Standards Board on Oct. 10.

ABA said FASB's pronouncement, FSP FAS 157-3, basically ignores the intent of SEC guidance issued on Sept. 30 -- which had been lauded by the trade group.

"Given the importance of this issue, the impact it has on the crisis in the financial markets and the seeming inability of the FASB to address in a meaningful way the problems of using fair value in dysfunctional markets, we believe it is necessary for the SEC to use its statutory authority to step in and override the guidance issued by FASB," ABA wrote in its letter. "Such action is necessary to meet the SEC's obligation to provide relevant, reliable and useful information to the users of financial statements."

ABA explained that FASB's guidance does enable the use of judgment, requires that broker quotes need only be a part of the valuation process and acknowledges that distressed sales don't represent fair value. It also provides a more realistic view of observable and unobservable data.

But it then requires that liquidity risk, from the buyer's perspective, be included in the cash-flow calculation -- leading back to distressed value as the basis for valuation.

ABA also noted that large banks have too many transactions to which the staff position would apply, while small banks don't have the resources to perform the procedures. In addition, other-than-temporary impairments in an illiquid market need to be addressed.

The ability to apply the guidance to third-quarter financial statements should also be considered.

The trade group pointed to a draft from 15 European countries that met yesterday that said, "Under current exceptional circumstances, financial institutions should be allowed to value their assets consistently with risk of default assumptions rather than immediate market value which in illiquid markets may be no longer appropriate."

ABA called on the SEC to override FASB's staff position with guidance that excludes forced sales, clarify other-than-temporary impairment and suspend the proposal on accounting for securitizations. It also asked that FASB does not pursue any projects tied to fair value accounting until a congressionally mandated study is reviewed.


Related:

Mixed Reviews on Mark-To-Market Guidance
Guidance on mark-to-market won't have much of a positive impact, according to one mortgage group. But bankers and mortgage bankers cheered the clarification.

Mortgage Backed Securities | MBS News | MBS Statistics
News about commercial and residential mortgage-backed securities. Stories about ratings actions and changes to servicer ratings. Studies and reports about the performance of securitizations and problem vintages and classes. Subprime, Alt-A, home equity and j u m b o analysis.



SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders