Loans backing securitized products are holding up fairly well even though the use of forbearance has increased. A combination of investor protections and changes in underwriting practices is helping.
The consumer ABS sector is in recovery mode after hitting a rough patch due to the coronavirus pandemic, according to comments made during a recent webinar.
Investors in the ABS market are mostly staying on the sidelines waiting for the coronavirus volatility to play itself out. Meanwhile, some investors are focusing solely on AAA-rated assets.
Following pressure from industry participants and lawmakers, the Federal Reserve added legacy commercial MBS and CLOs to the TALF. Industry is hoping that eventually non-QM assets might be covered.
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