RT Journal Article
SR Electronic
T1 Where Non-Agency Securitization Is Headed
JF The Journal of Structured Finance
FD Institutional Investor Journals
SP 13
OP 17
DO 10.3905/jsf.2011.16.4.013
VO 16
IS 4
A1 Shi Yuan Chen
A1 Michael Wilberton
A1 Philip Schockling
YR 2011
UL https://pm-research.com/content/16/4/13.abstract
AB New issuance of non-agency residential mortgage-backed securities (RMBS) has been virtually shut down since 2008. This article discusses several conflicts of interest surrounding the RMBS servicer that must be resolved before investors can regain confidence in new securitizations. Recent legislative changes such as SEC Rule 17(g) and the Dodd-Frank Act have created an environment difficult for banks to securitize and sell non-agency RMBS. However, BlackRock’s announcement that it is directly purchasing new prime jumbo mortgage loans and hiring third-party servicers signals that investors are becoming proactive in the absence of new bank-issued RMBS. As the U.S. government slowly cuts back on the GSEs’ involvement in supporting the mortgage market, non-bank institutions such as BlackRock will be instrumental in restarting the non-agency market.TOPICS: Fundamental equity analysis, technical analysis