Private Label MBS Revival Not Happening Soon

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A new ratings agency report suggests that no near-term recovery is expected in the non-agency securitization market.

The report, Why A Revival In The U.S. Private-Label RMBS Market Is Still Years Away, was announced Wednesday by Standard & Poor’s Ratings Services.

According to the New York-based company, “U.S. private-label residential mortgage-backed securities have faded into the shadows.”

S&P noted that it was the housing market that was a primary contributor to the exit of investors in private-label RMBS, and a market revival can’t be expected while housing is still weak.

“A revival in private-label RMBS is still several years away,” the report said.

However, S&P Senior Director Erkan Erturk said some short-term gains in the private RMBS market might be made as a result of a potential drop in conforming loan limits and passage of covered bond legislation.

But any long-term gains won’t be made until the housing market strengthens and housing finance reform is in place.

Mortgage Expert

Mortgage Daily Staff



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