Presidential candidate Elizabeth Warren has flagged concerns about the issuer-pays model used by credit rating agencies for securitized products. She said the SEC hasn’t done enough to address the conflicts of interest tied to the model.
Some investors prefer buying non-agency mortgages via whole loan transactions rather than stocked in MBS. Whole loans offer better yields and more loan information.
Redwood has suggested a number of changes that could boost issuance of non-agency MBS. The REIT wants reforms regarding risk retention and disclosures for non-agency MBS.
A class-action lawsuit against the issuer of a credit card ABS has the potential to eliminate the preemption banks rely on when contributing assets to MBS and ABS.
Noting strong demand for non-agency MBS, issuers are getting creative with the types of loans they package into deals. JPMorgan, Credit Suisse, Angelo Gordon and Goldman Sachs are all entering new sectors.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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