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April 07, 2017  

Mortgage-Bond Lawyers End Storied Careers

Two veteran mortgage-finance attorneys who played key roles in the creation of the Structured Finance Industry Group are retiring from the business.

Jordan Schwartz left his job as a senior counsel at Cadwalader Wickersham on March 31. Meanwhile, Larry Rubenstein plans to step down as a managing counsel in the capital-markets unit of Wells Fargo on May 1.

In addition to the work they performed for their employers, Schwartz and Rubenstein were among a group of American Securitization Forum board members that staged a revolt in 2013 over the power wielded by executive director Tom Deutsch — and broke off to start SFIG with an eye toward less-centralized control.

Both men subsequently served as founding members of the new trade group’s board, where representatives of member companies routinely rotate in and out of their seats. Schwartz also sat on the organization’s executive committee and wrote its first bylaws.

Those rules stressed more equal representation among member companies and helped set the stage for the creation of numerous committees. They additionally helped establish the board rotation, in which institutions are barred from sitting for more than two consecutive two-year terms and about one-quarter of the 42 members step down annually.

Schwartz already has been replaced on the board by Cadwalader partner Neil Weidner, who in turn will step down in June as the firm’s term expires. Rubenstein already exited the board in June 2016 upon the expiration of Wells’ term, but has continued to serve as co-chairman of the group’s residential mortgage committee alongside Dentons partner Stephen Kudenholdt.

At ASF, Schwartz and Rubenstein were involved in an effort to help revive the market for private-label mortgage bonds in the aftermath of the credit crisis. SFIG’s mortgage committee has carried on that campaign, in part by proposing “best practices” for industry participants.

While some progress has been made on that front, it remains an ongoing project. “One of the great things about SFIG is the very broad base of members,” Rubenstein said. “You are not always going to reach consensus, but the leadership is always going to be focusing on what is in the best interests of the market.”

Despite the central parts Schwartz and Rubenstein played in SFIG’s formation, the effects of their exits from the group are expected to be muted. “I don’t view this as a changing of the guard, rather a bit of a coincidence,” SFIG executive director Richard Johns said of the departures. “The rotation of the board does help us retain a legacy and continuity, while also ensuring new ideas are coming in simultaneously.”

Johns noted that SFIG routinely offers leadership training to incoming industry participants who contribute to its policy discussions.

Schwartz joined Cadwalader in 1987, following stops at Neal Gerber and Friedman & Koven dating back to 1981. In 2014, he moved aside as a partner and began his transition into retirement while remaining active at both the law firm and SFIG. He also has been leading his own toy company, Factory Entertainment.

Cadwalader’s securitization practice is headed by Mike Gambro and Stuart Goldstein. Under the rules he wrote at SFIG, Schwartz’s exit from the firm meant he also had to leave the trade group. His retirement was prompted partly by the continued sluggishness of the mortgage-bond market. “It makes me a little sad that private-label MBS is taking so long,” he said. “There is still a lot of baggage associated with the crisis. When I look at how long it might take . . . it helps justify my decision. It removes the temptation to stick around until it’s too late.”

Rubenstein, who was among Schwartz’s clients, joined Wells in 1995 from Prudential. His resume, dating back to 1976, also includes time at Goldman Sachs, Merrill Lynch, Freddie Mac and Ginnie Mae. He plans to spend more time on charitable projects, including those of the youth education-focused SFIG Foundation. Unlike SFIG, that organization has two board seats for unaffiliated members.