The SEC is facing pressure to address “ratings shopping” in the MBS and ABS markets. Big rating services are not keen to switch from the issuer-pays model.
The mortgage delinquency rate hit a record low at the end of last year, helped by a strong economy. There were a few signs of performance issues, including an uptick in certain delinquency types and foreclosure starts.
A handful of GSE-eligible mortgages in Goldman's deal have loan-to-value ratios greater than 80% and private mortgage insurance, which is uncommon for loans in non-agency MBS.