US introduces Covered Bond Act in bid to harness mortgage financing

With concerns hanging over the US securitisation market, some industry participants are pushing the case of covered bonds as an alternative. The US Covered Bonds Act introduced in March represents a step forward, but can investors accept the quirks of the new regime?

dollar-houses

The US has long resisted the charms of the 250-year-old covered bond market, despite numerous attempts to win over borrowers and investors.

A combination of regulatory hurdles and cheap alternative sources of funding for mortgage originators – due to the existence of Fannie Mae, Freddie Mac, Federal Home Loans banks and a strong securitisation market – has meant the world’s largest capital market has failed to be won over by covered bonds.

While the now-defunct savings and loans institution

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here