BARCELONA - Alas, a multinational residential mortgage securitizations still only exists in the dreams of nail-biting-real-estate-bubble-phobes in search of the ultimate in geographically diverse loan pools. Such a concept may only be a pipe dream, despite anticipated growth in pan-European lenders, as the concept of cross-jurisdictional securitization is "fraught with difficulty," primarily because of numerous legal and regulatory hurdles that stretch from borrower, to issuer, to investor and back again several times over, according to panelists at this year's Global ABS Conference' held here last week.
The idea could be an enticing one in the case of countries with either little or no issuance in the sector. Such offerings would likely have greater yields than other RMBS offerings as of late, which are at historically tight spreads in the U.S., and in Europe. Cross-jurisdictional securitization could also add much needed liquidity to the European housing market, investors said, but the benefits don't look like they are outweighing the detriments just yet.