Covered Bonds Seen as One Answer To Mortgage Market Problems

摘要

Covered bonds could provide one solution to the current mortgage market problems by requiring lenders to retain credit risk, providing better protection for borrowers, and eliminating the complexity of the current securitization process, according to witnesses at a December 15 House Financial Services Committee hearing.rnCovered bonds are debt instruments issued by a bank or other company and secured by assets owned by the issuer. Unlike a traditional securitization, the assets backing covered bonds remain on the issuer's balance sheet.