Trying Not to Use the Word 'Subprime'

As we all know, subprime securitization will return – someday. Of course, none of us know when that day will be. When it comes to creating mortgage bonds out of loans made to consumers with poor credit, many folks I’ve talked to think we’re looking at three to five years, at least. After all, only two jumbo MBS deals have come to market over the past 18 months, so why should anyone think subprime MBS will return? (And then there’s the risk retention rules to worry about.) And another point: the word ‘subprime’ is so toxic (thanks to the financial crash of 2008 which brought us the ‘Great Recession’) that it’s likely that when ‘subprime’ returns it will be called something else -- but what? Hard money? Home equity? Nonprime? And finally, a question for readers: does anyone recall when the first ever subprime MBS came to market and who the issuer was? If so, drop me a line at: Paul.Muolo@Sourcemedia.com...