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Senate Panel Examines Fundamentals of PLS Market

SEP 27, 2013 1:17pm ET
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The Senate Banking Committee has scheduled a hearing that will delve into the fundamentals of the private-label MBS market.

Committee members are working on a housing finance reform bill that that will depend on private MBS issuers replacing Fannie Mae and Freddie Mac.

The reform bill authored by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., requires credit enhancers to put 10% capital behind every newly issued MBS. Many consider the 10% levy too high and unnecessary.

Martin Hughes, the chief executive and director of Redwood Trust, is slated to testify at the Oct. 1. hearing.

Redwood Trust has completed 10 private-label MBS deals this year.

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