The SEC wants to make it easier to sell mortgage-backed securities again
What happened
The US Securities and Exchange Commission is asking for public comment on whether to loosen rules for selling residential mortgage-backed securities. This could make it easier for banks to package and sell home loans to investors, increasing the flow of money in the housing market.
Why it matters
After the 2008 financial crisis, rules around mortgage-backed securities became much stricter. This made it harder for banks to sell off their loans, which slowed down the housing market. If the SEC loosens these rules, it could bring back some of the practices that led to the crisis, but also make it easier for people to get mortgages.
The signal
Watch for specific proposals that change how much information banks must disclose about the individual mortgages in these securities, and whether the definition of what counts as an "asset-backed security" becomes broader.