Seattle Washington Building Expert Directory

SEC Approves New Securitization Risk Retention Rule with Broad Exception for Qualified Residential Mortgages

November 26, 2014 — Neil P. Casey & Lori S. Smith – White and Williams LLP
The Securities and Exchange Commission (SEC) and five other federal agencies recently approved a joint rule (the “Risk Retention Rule”) mandating that sponsors of certain types of securitizations retain a minimum level of credit risk exposure in those transactions and prohibiting such sponsors from transferring or hedging against that retained credit risk.[i]The final Risk Retention Rule will be effective one year after its publication in the Federal Register for securitizations of residential mortgages, and two years after publication for securitizations of all other asset types. The SEC vote was 3-2, with sharp dissents from Commissioners Gallagher and Piwowar concluding that the adopting agencies had missed a prime opportunity to rein in risky mortgage lending practices that had precipitated the 2008 financial crisis. Background Following the meltdown of the securitization markets in 2007 (particularly subprime residential mortgage-backed securities), and the resulting global financial crisis, the Dodd-Frank Act mandated that the U.S. federal banking, securities and housing agencies adopt and implement rules to require sponsors of most new securitizations to retain not less than five percent of the credit risk of any assets that the securitizer, through the issuance of an asset-backed security, transfers, sells or conveys to a third party. It was thought that requiring securitization sponsors to keep “skin in the game” would align the interests of the sponsors with the interests of investors and thereby incentivize the sponsors to ensure the quality of the assets underlying the securitization through appropriate due diligence and underwriting procedures when selecting assets for securitization. Although the Dodd-Frank Act explicitly exempted securitizations of certain types of mortgage loans called “qualified residential mortgages” (or “QRMs”) from this risk retention requirement, it invited the rulemaking agencies to define that key term, provided that their definition could be no broader than the definition of “qualified mortgage”adopted by the Consumer Financial Protection Bureau (CFPB) pursuant to the Truth in Lending Act.[ii] In considering how to define QRM, the rulemaking agencies were directed by the Dodd-Frank Act to take into consideration “underwriting and product features that historical loan performance data indicate result in a lower risk of default.”[iii] Reprinted courtesy of Neil P. Casey, White and Williams LLP and Lori S. Smith, White and Williams LLP Mr. Casey may be contacted at caseyn@whiteandwilliams.com; Ms. Smith may be contacted at smithl@whiteandwilliams.com Read the court decision
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Oregon to Add 258,000 Jobs by 2022, State Data Shows

March 26, 2014 — Alison Vekshin – Bloomberg
Oregon expects to add 258,000 jobs by 2022, a 15 percent increase driven by the economic recovery in the construction industry and growth in health care, according to the Oregon Employment Department. Construction industry employment is projected to rise 29 percent, the fastest of any industry, though short of pre-recessionary growth, the agency said March 12 in a statement. The predictions “reflect several ongoing trends: continuing recovery from the Great Recession, particularly for the construction industry; a growing health-care sector, due in part to an aging population; continuing population growth; and the need for replacement workers due to baby-boomer retirements,” the agency said. Read the court decision
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Reprinted courtesy of Alison Vekshin, Bloomberg
Ms. Vekshin may be contacted at avekshin@bloomberg.net

NY Estimating Consultant Settles $3.1M Government Project Fraud Case

November 23, 2020 — Eva Fedderly - Engineering News-Record
VJ Associates, a Hicksville, N.Y., estimating consultant, has agreed to pay $3.13 million in civil and criminal penalties to settle charges that the firm overbilled and falsified hours on multiple federal and state government-funded transportation and other contracts in New York and Massachusetts, the U.S. Attorney's office in Boston announced on Oct. 29. Reprinted courtesy of Eva Fedderly, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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Asserting Non-Disclosure Claim Involving Residential Real Property and Whether Facts Are “Readily Observable”

September 29, 2021 — David Adelstein - Florida Construction Legal Updates
Under Florida law, there is a claim dealing with the purchase and sale of residential real property known as a Johnson v. Davis or a non-disclosure claim: “[W]here the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer.” Lorber v. Passick, 46 Fla.L.Weekly D1952a (Fla. 4th DCA 2021). A seller’s duty to disclose extends to a seller’s real estate agent/broker. Id. A non-disclosure claim is asserted by the buyer of residential real property when the buyer discovers defects or damages with the real property that he believes materially affects the value of the property. While there may be the sentiment these are easy claims to prove, they are not. Remember, a non-disclosure claim deals with facts that materially affect the value of residential real property and are NOT readily observable. The use of the language “readily observable” has been found to mean:

“[I]nformation [that] is within the diligent attention of any buyer. To exercise diligent attention…a buyer would be required to investigate any information furnished by the seller that a reasonable person in the buyer’s position would investigate and take reasonable steps to ascertain the material facts relating to the property and to discovery them—if, of course, they are reasonably ascertainable.”

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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Settlement Ends Construction Defect Lawsuit for School

October 02, 2013 — CDJ STAFF
The school district in the Chicago-area town of Lake Zurich has made last settlement in a construction defect lawsuit. The $80,000 settlement from Terra Group of Chicago brings the total settlement with the Community Unit School District 95 to about $1.9 million. Other firms included Bovis Lend Lease, Legat Architects, Larson Engineering, and Illinois Masonry Corporation. The school district had contracted for work on several schools in the district. The buildings opened in 2004, with defect claims made in 2007. Defect claims included the failure of a retaining wall and need for reinforcement of stairwells. The settlement with Terra Group was made under the agreement that it was a compromise with no concession of liability. Read the court decision
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You Are Not A “Liar” Simply Because You Amend Your Complaint

March 14, 2022 — David Adelstein - Florida Construction Legal Updates
In litigation, it is common for a plaintiff to amend their complaint. They may amend to add additional parties. To add new claims. To change the factual allegations. Or, to change the theme of their case. Most of the time, complaints are not verified by the plaintiff. Instead, complaints are drafted and signed by the plaintiff’s counsel. A question becomes: how prior reiterations of a complaint can be used against the plaintiff to show they are a bunch of “liars” by making amendments to their complaint. Sounds prejudicial to the plaintiff, right? Particularly if there is a jury. The reality is that amending complaints for various reasons is routine. Doing so does NOT make the plaintiff a liar and is not a vehicle that a defendant should use to create this inference. A defendant that tries to do so simply wants to detract from the substantive facts and issues. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

Surviving the Construction Law Backlog: Nontraditional Approaches to Resolution

June 07, 2021 — Jeffrey Kozek - Construction Executive
Across the construction industry, COVID-19’s impact has caused a range of problems for contractors and projects—prolonged or intermittent work shutdowns, supply chain delays, pricing increases on materials and funding shortfalls. It has also led to court closures. The legal backlog for claims and disputes means that owners and contractors are facing the option of waiting until the courts are functioning the way they were previously or utilizing alternative approaches to resolution to keep projects and businesses running. Though courts across the country reopened to some extent in the latter half of 2020, many state and federal facilities were shut down or working with a limited capability for weeks or months. The closures not only froze the progress of numerous disputes already underway, but caused new schedule, cost and COVID-19-related claims to also be held up in the same backlog that is slowly being addressed under current restricted operations. New safety measures to reduce viral transmission, including reduced usage of courtrooms, restrictions on personnel and increased cleaning and sanitizing measures, have limited the number of cases courts can handle on a daily basis and lengthened legal timelines in ways many parties had not anticipated and cannot afford. Reprinted courtesy of Jeffrey Kozek, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Surge in Home Completions Tamps Down Inflation as Fed Meets

June 17, 2015 — Carlos Torres – Bloomberg
American builders are tamping down what little inflation there is. Construction companies completed 392,000 buildings with five or more units at an annualized rate in May, the most since 1988, Commerce Department figures showed Tuesday in Washington. “The pickup in demand is pushing up rents and also creating more incentive for builders to put up more units,” said Michael Hanson, a senior economist at Bank of America Corp. in New York. The jump in completions “helps offset some of the upward pressure we’ve seen” on rents, said. Read the court decision
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Reprinted courtesy of Carlos Torres, Bloomberg

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