@article {D{\textquoteright}Vari9, author = {Ron D{\textquoteright}Vari and Andrea Bryan and Asim Ali and Michael Grogan}, title = {Oversight and Due Diligence: Independent Credit Risk Managers and Trust Oversight in RMBS Transactions }, volume = {20}, number = {2}, pages = {9--18}, year = {2014}, doi = {10.3905/jsf.2014.20.2.009}, publisher = {Institutional Investor Journals Umbrella}, abstract = {In structured finance transactions, a trustee works collaboratively with the issuer and servicer to protect the financial interest of the investors. Large investors have been lobbying for residential mortgage-backed securities (RMBS) trustees to take on a more direct role to ensure that initial collateral conforms to the representations and warranties, put-back rights under the securitization{\textquoteright}s reps and warranties are exercised properly, all loan documentation is properly executed and transferred, servicers are performing their duties, and adequate transparency is provided to the investors. RMBS trustees, however, are not currently equipped to handle any of these functions. Given the market and technical expertise required in the mortgage securitization arena, trustees could benefit from partnering with or retaining the services of an independent credit risk manager (CRM) steeped in a high degree of domain knowledge related to evaluation, modeling, stress testing, regulatory reporting, and complex asset credit underwriting. This article seeks to explain the role an independent CRM can provide in securitization of residential mortgages, with a specific focus on governance.TOPICS: MBS and residential mortgage loans, legal/regulatory/public policy, credit risk management}, issn = {1551-9783}, URL = {https://jsf.pm-research.com/content/20/2/9}, eprint = {https://jsf.pm-research.com/content/20/2/9.full.pdf}, journal = {The Journal of Structured Finance} }