FCA moratorium guidance to lessen RMBS protections

By Tom Brown
26 May 2020

The UK’s Financial Conduct Authority (FCA) has encouraged banks not to record mortgage loans with payment moratoriums as being in default, delaying default related triggers designed to protect noteholders and causing concerns around RMBS deal performance.

The FCA has encouraged banks to grant mortgage moratoriums on a largely self-certified basis, leading to higher moratorium levels in the UK than in the rest of Europe.

Market participants say this is delaying default related triggers in RMBS deals from activating, many of which are put in ...

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