Lindsey Johnson
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- Milken Institute1h 0m
How to Restart the Private Market for Mortgage Credit
Ed DeMarco, Lindsey Johnson, Stanford Kurland, Ed Royce, Bryan Whalen, Stan Curlin
The Federal Housing Finance Agency and Treasury Department are actively accelerating Credit Risk Transfer initiatives to move approximately $5 trillion in mortgage credit risk from government-backed balance sheets to private capital markets. Despite significant growth in volume and investor participation from asset managers and hedge funds, the market faces structural challenges including liquidity constraints, regulatory barriers for banks, and a lack of data standardization that hinders small lender access. Industry stakeholders advocate for legislative reforms to broaden the investor base, expand reinsurance mechanisms, and standardize loan-level data to fully revive the private label securities market and ensure long-term financial stability.