Mortgage-Bond Revival Cut Short as Wall Street Sidelined
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Royal Bank of Scotland Group Plc banker Trez Moore says the firm’s U.S. securities arm recently created a group to buy home loans from other lenders. He’s just not seeing much opportunity for what used to come next.
The post-crisis revival in the business of bundling new mortgages into bonds without government backing and then selling them to investors is petering out. Issuance has dropped to $1.6 billion this year from more than $6 billion in the first five months of 2013 and is a speck of the $1.2 trillion that was sold annually during the U.S. housing boom of the 2000s.