FinTech Startup Income& Readies Mortgage-Backed Private Securities
Posted: Sun Mar 27, 2016 1:32 pm
The securitization of a mortgage, akin to a CFD on an underlying asset, echoes the derivatives that led to the subprime mortgage crisis last decade, yet it’s important to remember the word ‘sub’ in the context of subprime loans, as new FinTech startups approach the post-Dodd Frank marketplace.
Subprime loans were the bad or risky debt that underlined the crisis, due to a perfect storm of predatory lending, consumers with poor credit, inaccurate ratings, a multi-trillion dollar derivatives market created from the mortgages, and excess leverage that inflated the bubble before it popped from falling housing prices.
After the sweeping regulatory reform that ... (read more)