Securitization

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RMBS Issuers May Let Servicers Off the Hook for Advances: DBRS 

Aug 24, 2009By

The current recession is characterized by locks in liquidity which are preventing the proper servicing of mortgage finance products. For example, servicers must advance delinquent principal and interest to the trustee in US residential mortgage-backed securities (RMBS), at times creating a financial burden. However, issuers could avoid the pressure on servicers’ liquidity by pursuing RMBS structures that do not require advances, rating agency DBRS suggests in commentary Monday.

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