The industry is preparing itself for whether or not the government will ever wean the housing market from its support. According to an article in Bloomberg, the Structured Finance Industry Group released the first in a series of papers mapping out its effort to create recommended contract language for new securities to address the mistrust that’s plagued the market since the 2008 financial crisis.
Rebuilding confidence in the private mortgage-bond market will be needed for the government to shake off its dominant role in the $9.4 trillion home-finance system, said Eric Kaplan, who is helping lead the SFIG effort. Treasury Secretary Jacob L. Lew said in a June speech that his department was also starting an initiative to bolster the market for mortgage bonds without taxpayer backing, known as non-agency securities.
“Whether it’s slowly or quickly, that day will come, and if we haven’t solved the issues, we may not have the investors to provide that capital,” Kaplan, an executive at Shellpoint Partners LP, the lender backed by mortgage-bond pioneer Lewis Ranieri, said yesterday on a conference call with reporters.