The RMBS private-label market will continue to be stalled by the still-weakened housing market, according to a Standard & Poor’s report. The release also warned investors not to mistake a potential flurry of issuance in the coming months with a lasting recovery.
“We believe there may be hope for modest private-label RMBS activity in the short term, however," S&P analysts said. "Once the temporarily raised conforming loan limits for high-cost areas fall on Oct. 1, 2011, we expect that there should be some private-label prime Jumbo issuance in subsequent months. We also expect that additional activity should emerge if and when the covered bond legislation is enacted, which might be in 2012.”