As the Treasury’s fourth-quarter 2010 report on the legacy PPIP program last week showed, private-label residential MBS have proven to be a vehicle in some circumstances for generating returns, so it might be worth keeping a cautious eye on the sector and regulatory developments like new rules for due diligence providers that could affect it.

Among the Securities and Exchange Commission’s “final” rules related to due diligence is an effort to hold providers to an “expert” opinion, an onus that in the past was said to have proved problematic when applied to rating agencies.

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