RMBS Transaction Managers Would Improve Accountability: Fitch

Transactions involving residential mortgage-backed securities should include a manager to improve accountability, Fitch Ratings has recommended.

A transaction manager would hold servicers more accountable, as the manager would provide improved oversight and increased transparency in investor reporting, Fitch said.

The transaction manager would be responsible for coordinating all involved parties, including servicers, trustees, custodians, vendors and investors. The manager would have the authority to replace underperforming servicers. The transaction manager would have other duties, including the enforcement of agreements, the resolution of breaches of representations and warranties, and credit risk management.

Transactions that include a manager could warrant "modestly lower credit enhancement requirements," Fitch said.