New issue, private-label MBS backed by either recent vintage or seasoned loans funded since the downturn have generally had some type of mechanism to enforce and/or clarify parameters for repurchases, a Moody’s Investors Service analyst told National Mortgage News.
The trend has resulted from a slew of repurchase disputes that have risen as deals from the 2005-2007 period of loose underwriting have aged and underperformed.
Lack of such a mechanism is considered negative, according to a recent Moody’s report.
Generally, the repurchase mechanism has taken the form of an agreement to enter arbitration in new issue deals backed by recent originations -- but it could also be a situation where the parameters for repurchases are detailed and clearer than they historically have been, said the analyst who authored the report, Moody’s vice president Kathy Kelbaugh.
