ASF: Private-label MBS Market Not Yet Returned Despite New Deal

The first private-label security backed by "new" originations seen since 2008 marks the start of the residential mortgage-backed securities market's comeback, but pending regulation and other challenges mean its full return is likely to take some time, according to the American Securitization Forum. The $222 million Redwood Trust Inc. deal backed by "extremely high quality" jumbo loans "signals that the private RMBS market is beginning to return, but it does not signal that RMBS has returned," said Tom Deutsch, executive director of the American Securitization Forum. "The market is extremely fragile and we need to be very careful, especially as policymakers consider new regulation, that we act thoughtfully to ensure vitally needed private credit starts flowing again to American consumers."