Reviving Private-Label MBS: a Heavy but Necessary Lift

Posted To: MND NewsWire

While securitization of auto loans is about 16 percent higher than it was in 2001 and agency mortgage-backed securities (MBS) are up over 50 percent, the issuance of private-label securities (PLS) , which collapsed in the housing crisis, has not rebounded. They are down by more than 70 percent since 2001 and 95 percent since they peaked in 2005. In a paper written for the Urban Institute’s Housing Finance Policy Center, Senior Fellow Jim Parrott discusses why, when capital is flowing through virtually every other secondary market channel, is it avoiding this one and what might be done about it. Parrott says right now the PLS economics just don’t work . Issuers can’t match the yield of government backed issues relative to the risks and they can’t compete with portfolio lenders because banks…(read more)

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Reviving Private-Label MBS: a Heavy but Necessary Lift
Reviving Private-Label MBS: a Heavy but Necessary Lift

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