Moody's: Mortgage Securitization Asset Markets Face Long and Bumpy Road to Recovery
The performance of securitized assets will continue to deteriorate for commercial mortgage-backed securities (CMBS) into 2011 and possibly 2012, according to a new report by Moody's Investors Service. For residential mortgage-backed assets (RMBS), performance will decline into late 2010 or early 2011. The prospects for a recovery in securitization markets remain cloudy and depend on the bottoming of the housing market and the beginning of a decline in unemployment, the report concludes. When the markets return, a higher investor risk premium will mean a higher cost for securitizations. Demand by investors will be down significantly with the anticipated absence of the once-formidable special finance vehicle buyers of Collateralized Debt Obligations (CDOs). By Robert Stowe England MindOverMarket.blogspot.com September 15, 2009 “While there appears to be a glimmer at the end of the tunnel, it is still too early to interpret improvement or slowed deterioration in a particular sector as...