Private-Label Securities (PLS) Market

The market for private-label residential MBS is an important channel by which private entities, rather than taxpayers, invest in mortgage credit risk. While fundamental problems in this market were exposed prior to 2008, solutions have been more difficult to implement than many expected. MBA supports both market-based and policy-based reforms that would make the private-label market more attractive as opposed to reforms that aim to "crowd in" private capital through regulatory measures to shrink the agency market. Key reforms relate to data disclosures, capital requirements, and loan-level due diligence.