Home >> Daily Dose >> 2015 Looks Bright for RMBS Market
Print This Post Print This Post

2015 Looks Bright for RMBS Market

money-graph-ratesThe upcoming year is expected to bring continuing improvements in the market for residential mortgage-backed securities (RMBS), according to one forecast.

In its predictions for 2015, Moody's says stronger underwriting standards, third-party reviews, and the implementation of risk retention rules will all bolster the credit quality of new private-label RMBS.

"New regulations setting strict standards for origination of qualified mortgages along with ability-to-repay rules will drive the strong credit quality of new issuance," said Navneet Agarwhal, managing director at Moody's.

Agarwhal added that even non-qualified mortgages are likely to see an improvement in credit quality "because they need to comply with ability-to-repay rules as well."

Moody's also expects private-label RMBS issuance will rise slowly over the next year, slightly exceeding 2014 levels. While the collateral backing these securities will likely have weaker credit characteristics, regulatory guidelines are expected to help boost the credit quality of those pools, as well.

Legacy private-label securities are also anticipated to perform better as economic improvements bring down delinquencies. However, loss severities for seriously delinquent loans will continue to increase, Moody's predicts.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
x

Check Also

White Paper: ‘Unprecedented Times’ for Housing

New research finds the impact of COVID-19 could cost the industry $150 billion in real estate closings in Q2 2020. Click through to read more.

GET THE NEWS YOU NEED, WHEN YOU NEED IT.

With daily content from MReport, you’ll never miss another important headline in originations, lending, or servicing. Subscribe to MDaily to begin receiving a complimentary daily email containing the top mortgage news and market information.