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AMI Opposes the TIA Policy Rider to the Omnibus Appropriations Bill

Tuesday, December 15, 2015. Washington, D.C.

December 15, 2015

The Honorable Mitch McConnell

Majority Leader

U.S. Senate

The Honorable Harry Reid

Minority Leader

The Honorable Paul D. Ryan


U.S. House of Representatives

The Honorable Nancy Pelosi

Minority Leader

U.S. House of Representatives

Dear Congressional Leaders:

The Association of Mortgage Investors (AMI) writes to express its opposition to the inclusion of any legislative policy rider concerning the Trust Indenture Act (TIA) of 1939 to the pending appropriations bill.  In light of nearly a century track record of the TIA’s effectiveness, value, and its unique legal role in the protection of U.S. capital markets, the burden on the proponents in favor of any modification must be a heavy one.

AMI represents managers of mutual funds and money for state and local pension and retirement funds and for a range of public institutions, including unions, teachers, and first-responders, on a daily basis.  The AMI was formed to become the primary trade association representing investors in mortgage-backed securities (MBS), along with life insurance companies, and state pension and retirement systems, university endowments.  It has become the sole unconflicted buy-side investor group and developed a set of policy priorities that we believe contribute to achieving the goal of restoring private capital to the U.S. mortgage market and effective investor rights.  AMI was founded to play a primary role in the analysis, development, and implementation of mortgage and housing policy that keep homeowners in their homes and provide a sound framework that promotes continued home purchasing.

As many have noted, the TIA was a landmark achievement that helped restore the integrity of the U.S. financial markets and make private capital available for American investment.  As history teaches us, the 1929 financial crisis resulted in a crash of the stock (equities) markets.  Yet, it is less well-known that the 1929 crisis also resulted in a bond industry crash as well.  In response, in 1934, Congress tasked the Securities and Exchange Commission  (SEC) to explore solutions for re-vitalizing the corporate bond market.  The SEC prepared a report authored by the Commissioners, including future U.S. Supreme Court Justices William Douglas and Abe Fortas.

The 1936 SEC report on the problems surrounding the corporate bond market bears striking similarities to recent the history faced by the investors and the American public.  The report reads as if torn from recent financial news headlines:

The basic problem is to refashion the trust indenture [a corporate bond] for the purpose of according greater protection to investors.  That entails prescribing a minimum standard specifications for the conduct of trustee and issue thereunder.  . . .  This means a more proper balance between the interests of investors and requirements of issuers … where its failure to take swift and positive action leave the investors without effective protection of their interests . . . In this situation the inherent incompatibility of interest arises, common to all creditors and debtors . . . .

Accordingly, the SEC report catalogs a number of the resulting problems from the lack of appropriate investment standards, systems, and safeguards present up until Congress’ vigilance in shoring up the capital markets.  The result of the 1936 SEC report was Congress’ enactment of the TIA.  In particular, the TIA addressed many defects of the bond industry of the early 20th century.

The TIA’s legal framework is critically valuable to the U.S. economy and all bond-holders, including those seniors and retirement savers.  This landmark legislation has enabled the corporate bond market with the standards and structures necessary for its efficient operation – so much so that most investors do not even realize that its protective provisions are in effect.

We urge that any changes to the TIA proceed via regular order, with transparency, and in consultation from stakeholders from the financial services industry, academia, the legal community, and consumer groups.  The consequences of any hasty, retroactive TIA amendment is likely to have a chilling effect on future U.S. capital investment for decades and potentially be damaging to seniors, retirees, and 401K savers across the Nation.

Thank you for your attention to these concerns.  Please do not hesitate to contact the AMI if you have any questions or utilize us as a technical resource regarding these matters.


The Association of Mortgage Investors (AMI)



The Hon. Richard Shelby, Chairman, U.S. Senate Committee on Banking Housing, & Urban Affairs

The Hon. Sherrod Brown, Ranking Member, U.S. Senate Committee on Banking, Housing, & Urban Affairs

The Hon. Jeb Hensarling, Chairman, U.S. House Committee on Financial Services

The Hon. Maxine Waters, Ranking Member, U.S. House Committee on Financial Services


AMI Commends Chairman Tom Marino and the House Judiciary Committee for Responsible Oversight over Defective DoJ Bank Settlements that Negatively Affect Average Americans, Unions, and Seniors

For immediate release

Contact: 202-327-8100

Thursday, February 12, 2015

The Association of Mortgage Investors (AMI) Commends Chairman Tom Marino and the House Judiciary Committee for Responsible Oversight over Defective DoJ Bank Settlements that Negatively Affect Average Americans, Unions, and Seniors

     The Association of Mortgage Investors (AMI) commends House Judiciary Subcommittee Chairman Tom Marino (R-PA) and the House Judiciary Committee for its responsible oversight regarding the defective U.S. Department of Justice bank settlements that negatively affect average Americans, unions, and seniors.

AMI represents the managers of mutual funds and long-term investors for state and local pension and retirement funds for a range of public institutions, including unions, teachers, and first-responders.  AMI members are fiduciaries for their clients.  In that capacity, it is incumbent upon them to review any and all situations that would impact their clients’ investments, such as the recent settlements.

On Thursday, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law holds a hearing examining a number of issues, including the bank-servicer settlements.  AMI and its members have long been critical of these settlements.  AMI Board President Vincent A. Fiorillo noted, “The objective of any settlement should be to advance the public interest and to help responsible consumers who may have gotten into trouble, not creating deceptive big dollar headlines for political gain.”

In recent years, a number of settlements with the Justice Department and state Attorneys General have resulted in the responsible party shifting a portion of the settlement costs to RMBS investors.   Yet, it is antithetical, if not patently unfair, for any institution to pass its penalty to another party, such as certificate holders such as seniors and 401K savers.  These precedents are very troubling for investors and their impact on the general public.  These are not unforeseen consequences, but rather an obvious scheme by bank-servicers to evade liability for their misconduct by further abusing their duties to investors.  This affects our clients, and in turn the general public, whom are “Main Street.”

AMI has been on-the-record as supporting a settlement of claims against the mortgage servicers, provided that it does not harm average Americans and their 401Ks.   This means that any settlement must be appropriately designed to address such alleged wrongdoing while not settling with the money of innocent parties. The retirement security of these innocent parties will likely be impacted by this settlement as it is currently filed. The settlement was negotiated among the state Attorneys General, the federal government, and certain mortgage servicers.  On behalf of the public interest, AMI asks that any future settlements focus on directly helping responsible consumers, not “short changing” them.

AMI supports long-term, effective, sustainable solutions to the housing foreclosure crisis.  It is generally supportive of a settlement if it ensures that responsible borrowers are treated fairly throughout the foreclosure process; while at the same time providing clarity as to investor rights and servicer responsibilities.  The ultimate settlement should ensure that our clients, who were not involved in the alleged activities and, who likewise were not a participant in any negotiations, do not bear the cost of the settlement.  Specifically, mortgage servicers, if at all, should only receive limited, reasonable credit for modifying mortgages held by third parties, which are often pension plans, 401K plans, endowments and “Main Street” mutual funds.  To do otherwise, will damage the RMBS markets further and limit the ability of average Americans to obtain credit for homes for generations to come.

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The Association of Mortgage Investors represents private investors, public and private pension funds, and endowments, all of whom support the efforts of Congress and the Administration to help responsible, though distressed homeowners avoid foreclosure. For more information, visit

The AMI is now live on Twitter with the most recent news on mortgage investing. Follow us: @MortgageInvest. 

AMI Board President Vincent Fiorillo on CNBC’s Santelli Exchange

AMI Board President Vincent A. Fiorillo of Doubleline Capital recently appeared on CBNC’s Santelli Exchange discussing eminent domain, housing, and likely market trends.

The Riverside Press-Enterprise Editorial Condemns JPA Eminent Domain Plan

AMI notes GMU Prof. Anthony Sanders on Eminent Domain Harming the Public, Investors

AMI invites your attention to the following recent article by the eminent George Mason University Distinguished Professor of Estate Finance Professor Anthony Sanders.

In it, he calls the proposed San Bernardino eminent domain condemnation idea a “disgrace.”

The MBS Investor’s Case Against the Mortgage Settlement

AMI’s concerns about the National Mortgage Settlement are discussed in the following Real Clear Markets article.

March 22, 2012

The MBS Investor’s Case Against the Mortgage Settlement

By Anthony Randazzo

Mortgage-backed securities investors are starting to boil over with righteous indignation after details on the $25 billion national mortgage settlement emerged last week.  The settlement confirmed that they might have to forfeit $17-$20 billion to pay for most of the deal. As was long suspected (and covered in this space on Feb 23, 2012 in “A Highly Unjust Mortgage Settlement”), the headline figure of banks paying $25 billion for their robo-signing of foreclosure documents is bogus, and banks may only wind up paying $5 billion in cash of the overall deal. . . .

For the entire article, please click the following link:

Press Release: AMI Cautions State AGs Don’t Rush a Settlement; Get It Right

For immediate release

Contact: 202-327-8100

Tuesday, January 31, 2012


The Association of Mortgage Investors Cautions State Attorneys General: Don’t Rush a Settlement; Get It Right

The Association of Mortgage Investors (AMI) issued the following statement concerning the state Attorneys General, the federal government, and certain mortgage servicers possibly nearing a settlement of claims.  AMI’s members manage tens of billions in mortgage assets (bonds) for state and local pension and retirement funds for a range of public institutions on a daily basis . . .

For the full text of the release please click here: AMI_press_release_1_31_2012

AMI Testifies at House Financial Services Subcommittee NYC Field Hearing

Sept. 7, 2011.

AMI will testify at the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises.

Hearing on : “Facilitating Continued Investor Demand in the U.S. Mortgage Market Without a Government Guarantee”.

Please click the link for AMI’s written statement:

AMI House Fin Svs GSE Subcommittee Written Statement Sept 7 2011

AMI Testifies before U.S. Senate Banking Subcommittee

For immediate release

Contact: 202-327-8100

Wednesday, May 18, 2011

AMI Testifies before U.S. Senate Banking Subcommittee;

Calls for Enhancing Securitization through Greater Transparency, Standardization, Loan Level Data, and Model Pooling and Servicing Agreements (PSAs)


Washington, D.C. – The Association of Mortgage Investors (AMI) welcomes the opportunity to testify before the U.S. Senate Banking Subcommittee on Securities, Insurance and Investment hearing on “The State of the Securitization Markets.”  In its congressional statement, AMI calls for a number of capital market reforms, to address the following defects of the current system, including, market opacity, an asymmetry of information, and a thorough a lack of transparency; poor underwriting standards; a lack of standardization and uniformity concerning the transaction documents; numerous conflicts-of-interest among servicers and their affiliates; antiquated, defective, and improper mortgage servicing practices; and, investors lack effective legal remedies for violations of RMBS contractual obligations and other rights arising under state and federal law if representations regarding those facts turn out to be untrue.

For more, please click here AMI_press_release_5-18-2011

AMI’s congressional hearing statement is available by clicking here AMI_Sen_Banking_SII_Subcomm_Statement_May_18_2011

AMI Urges Attorneys General and CFPB, Don’t Bail Out the Banks Again


AMI Urges Attorneys General and CFPB, Don’t Bail Out the Banks Again,

Middle-Class America and the Pensions Must Not Bear the Settlement Costs

Washington, D.C. – This week in Washington, D.C., key parties met for face-to-face settlement negotiations surrounding the mortgage servicing and foreclosure investigation into alleged misconduct, such as robosigning. The Association of Mortgage Investors (AMI) urges all state and federal parties to the ongoing investigation to protect the rights and investments of   investors so that the final settlement only penalizes the servicers who have acted irresponsibly, acted to the detriment of borrowers and pension funds, and does not result in another government bank bailout.

Please click the following linl for our most recent press release: