Private-Label Securities – Technological Solutions to Information Asymmetry and Mistrust

At its heart, the failure of the private-label residential mortgage-backed securities (PLS) market to return to its pre-crisis volume is a failure of trust. Virtually every proposed remedy, in one way or another, seeks to create an environment in which deal participants can gain reasonable assurance that their counterparts are disclosing information that is both… ShareTweetShare

Non-Qualified Mortgage Securitization Market

Since 2015, a new tier of the private-label residential mortgage-backed securities (PLS) market has emerged, with securities collateralized by non-qualified mortgage (non-QM) loans. These securities enable mortgage lenders to serve borrowers with non-traditional credit profiles. The financial crisis ushered in a sharp reduction in mortgage credit available to certain groups of borrowers. Funding sources, such… ShareTweetShare

Reviving the Private-Label RMBS Market with Improvements to the Securitization Process

Weaknesses in securitization processes for mortgage loans contributed to the financial crisis of 2007 – 2008 and have led to a decade-long stagnation in the private-label residential mortgage-backed securities (PLS) market. Although market participants have attempted to improve known weaknesses, lack of demand for private-label RMBS reflects investors’ reluctance to re-enter the market and the need for continued improvements to securitization processes to re-establish market activity.  While significant issues still need to be addressed, promising advances have been made in the PLS market that improve information provided to investors as well as checks and balances designed to boost transaction performance. ShareTweetShare