Lenders are compensating for climate change by requiring higher downpayments for properties in areas of higher flood risk and increasing subordination levels in securities with a higher concentration of mortgages in flood zones.

As AI becomes ubiquitous in both the origination and securitization of loans, the U.S. regulatory framework is likely to evolve closer to the stricter rules used in the European Union.

A proposal from FINRA to reduce the timeframe in which trades of MBS and ABS must be reported didn’t sit well with some industry participants, prompting the SEC to take a closer look at the proposal.

Federal Reserve Governor Michelle Bowman highlighted issues in the proposed rule that impact MBS and ABS.

The Structured Finance Association, which is developing a compliance tool to facilitate uniformity in the non-agency MBS market on QM standards, has run into a vexing issue regarding the definition of a QM.

The diversification inherent in MBS may be the ideal tool to combat climate risk in housing finance.

Regulators are pushing higher capital requirements on banks and looking favorably at credit-risk transfer transactions, helping to increase CRT issuance. Investor demand for bank CRT is also outstripping supply.

New prohibitions against conflicts of interest in the MBS and ABS market will take effect in June 2025. But SEC officials are urging industry participants to raise compliance concerns, if any, as soon as possible.

New standards for qualified mortgages have created documentation hurdles for lenders and loan aggregators.

Proposed capital requirements for large banks would create “perverse incentives” for banks regarding securitization activity, according to a new analysis by the Securities Industry and Financial Markets Association.