BlackRock is planning to launch a fund that will begin financing U.S. home loans specially made for a new kind of RMBS, according to a Reuters report.

The $1 billion BlackRock Mortgage Investors Fund will provide capital for prime Jumbo loans via lenders while maintaining strict underwriting guidelines, Reuters reported.

The loans will be used for bonds similar to private-label RMBS, although BlackRock is addressing the weaknesses of the old model such as the "sloppy" loan documentation as well as potential conflicts that arise when the same bank serves as the originator and servicer on the loan.

Once the BlackRock fund reaches a suitable size, it will decide on whether a public securitization is feasible or to maybe create "participation certificates" with loans that will be carved up for sale, the Reuters report said.

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