The Rebirth of Securitization: Where Is the Private-Label Mortgage Market?

In the wake of the financial crisis, new securitization activity ground to a halt in all asset classes that did not have an implicit or explicit government guarantee. Although securitization has since resumed in most asset classes, including automobiles, credit cards, collateralized loan obligations (CLOs), and commercial mortgage-backed securities (CMBSs), the private-label residential mortgage-backed securities market remains stagnant. This article discusses why the residential mortgage market experience has been so different and provides guidance about what remains to be fixed. TOPICS:MBS and residential mortgage loans, financial crises and financial market history