The Obama-era task force set up to investigate MBS fraud that contributed to the 2008 crisis has finished its job. Its efforts led the DOJ to collect $36 billion in penalties from banks, originators and rating agencies.
The rating service will assess expected payments from private mortgage insurers, with implications for MI-linked note issuance and potentially non-agency MBS with loans that have private MI.
If the proposal is implemented, some mortgage originations that have gone into bank portfolios would likely go into MBS instead. The impact on bank investment in MBS and ABS looks to be much more modest.