Secondary Markets & Securitzation
Private-label securitization will come back as housing finance looks for ways to change the way mortgages are funded. Although a short-term solution doesn’t seem likely to materialize, substantial talks to reform Fannie Mae and Freddie Mac are now under way.
In this issue, we take a look at the major challenges facing the securitization markets, including regulatory reform, risk-based capital requirements, loan servicing and government-sponsored housing reform.
In this issue:
- REDUCING CRA RELIANCE: We take a look at reducing the reliance on credit rating agencies. Going forward, investor due diligence will take on a larger role in managing securities portfolios.
- TRANSITION RATES FOR RMBS: Examining the rate at which loans move from one payment category to another — from current to 30 days delinquent, for example — can provide clues to the likelihood of future defaults.
- APPRAISAL SCRUTINY IN STORE: Accurate valuation of the securing assets is key to restoring confidence in investor markets.
