November 10, 2015
Dear Sirs:
I understand that you have structured the proposed amendment to the FINRA Rule 4210 to establish margining requirements to the single family MBS - TBA market such that these requirements also pertain to the Multifamily/Healthcare GNMA and FNMA MBS markets.
Your doing so appears to reflect ignorance of the manner the Multifamily/Healthcare GNMA and FNMA MBS markets currently operate. Your proposed “requirements” for the single family market should not pertain to the multifamily / healthcare markets because the single family market and the multifamily markets are significantly different and your proposed regulations do not give recognition to those differences. For starters, the Multifamily/Healthcare GNMA and FNMA MBS markets do not have any “to be announced” loans. All loans are specified in advance and all have been fully underwritten by either FHA or FNMA.
At a minimum, if you are afraid of getting into details about this, at least exempt those GNMA and FNMA MBS Multifamily and Healthcare securities for which all the loans are fully specified. Let the market participants decide how to handle those MF and Healthcare Loans which would not be exempt from your proclamations. Please note that this should not be a problem since all the MBS loans are in fact fully specified and this would insulate the Multifamily/Healthcare GNMA and FNMA MBS markets from what appears to be the lack of knowledge or sensitivity in this area evidenced by you to date.
To potentially cause significant damage to an industry which has continually operated and functioned successfully over the past twenty years is inappropriate for a regulatory body charged with the mandate of responsible oversight.
Respectfully,
Bernard P. Gawley
Chief HUD Underwriter
The Ziegler Financing Corporation