Congress is getting closer to passing legislation that would help legacy MBS and ABS transition away from LIBOR; there’s a securitization angle in Zillow’s move to discontinue its fix-and-flip business.
During a Capitol Hill hearing, House Democrats focused on credit rating shortcomings that allowed for the subprime crisis of 2007-2008 and inadequate reforms that followed.
One of the five draft bills proposed by the House Democrats this week seeks to establish a board that would be responsible for assigning rating services to provide grades on MBS and ABS.
The Structured Finance Association is working with members of Congress on a potential bill to help facilitate the transition away from the scandal-scarred LIBOR.
A longer statute of limitation and increased disclosure requirements could help attract long-term investors in the MBS and ABS market, industry experts recommend.