After playing defense in 2022, investors appear to be willing to deploy capital even as the MBS and ABS markets face numerous headwinds. Attendance at this week’s SFVegas conference hit a record level.
S&P Global Ratings said that the advantages of decentralized finance securitizations, including increased transaction speeds and greater transparency, are counterbalanced by several risks in the sector. Many of the risks are inherent to the use of a blockchain, like difficulty correcting errors in registered information.
Attorneys and structured finance trade groups are combing through the SEC’s proposed rule on conflicts of interest in ABS transactions. Some are concerned the rule might prevent actions to support liquidity or hedging.
The Structured Finance Association warned that the Federal Trade Commission’s proposed rule on auto dealers could have unintended consequences for the securitization market.
In 2020, the SEC made a move to apply a disclosure rule that had been in effect for nearly 30 years to MBS and ABS. Industry participants have been able to delay enforcement of the rule while seeking changes to the disclosure requirements.
Performance of student loan ABS declined in the second quarter. And a moratorium on payments for federally backed student loans is set to expire at the end of August.
Both delinquencies on securitized student loans and prepayment rates on student loan ABS are up and could increase further due to the Biden administration’s efforts to help distressed borrowers.
Cybersecurity disclosure rules for ABS should be focused on primary servicers, the Structured Finance Association said in comments to the Securities and Exchange Commission.
The SEC’s proposal on disclosure requirements and other standards for hedge funds, private equity funds and venture capital funds could have negative impacts for CLOs, SFA and others warn.
Is Onity Group eyeing a sale? Perhaps. And why not? Servicing values are approaching a 25-year high.
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