Some Options Exist for MBS/ABS Issuers to Finance Risk Retention, though Compliance is Complicated
October 12, 2017
Risk-retention requirements established by the Dodd-Frank Act generally require sponsors or contributing lenders to retain risk from MBS and ABS issuance to align their interests with those of investors. Some issuers are financing their risk-retention obligations even though regulations regarding such transactions are murky. “A security sponsor or majority-owned affiliate must reconcile a variety of different requirements in structuring a secured financing of its risk-retention ...