The American Securitization Forum’s Project RESTART: The Securitization Industry’s Attempt to Restore Investor Confidence

Abstract

The residential mortgage-backed securities (RMBS) market, which served as the backbone of housing finance in the United States for decades, ground to a complete halt in 2008 as a result of losses emanating from lax underwriting of mortgage loans and the profusion of mortgage products that proved to be inherently risky during a period of declining home prices. Although many originators have tightened their underwriting standards since mid-2007 and abandoned the riskiest types of mortgage products, the RMBS market will not resume its critical function in any meaningful way until investor confidence in the quality of the mortgage loans backing RMBS, and the integrity of RMBS structures, has been restored. This article examines the American Securitization Forum’s Project on Residential Securitization Transparency and Reporting (Project RESTART), which is a broad industry-based effort to restore investor confidence in the RMBS market by increasing loan-level transparency and improving the RMBS infrastructure.

TOPICS: MBS and residential mortgage loans, CMBS and commercial mortgage loans, real estate