Capital Markets and Structured Transaction Mortgage insurance for RMBS trusts has been in use throughout Australia since the 1990's because it makes sound business sense.
Lenders’ mortgage insurance:
- enhances the overall credit worthiness of the transaction by providing insurance against capital losses and recovery expenses on each insured loan in the trust;
- improves the quality of assets in the trust. Policies are only provided on loans that are accepted after the insurer completes its analysis and due diligence using proprietary credit risk management tools, expertise and specialist underwriters;
- reduces cost of funds across all bonds when investors give credit to Lenders mortgage insurance as an additional credit enhancement to subordination; and
- increases the credit rating of bonds issued by the trust because of the above benefits, with reduced subordination levels for senior and junior tranches.
Insurance can be obtained on either a loan-by-loan basis, at the time the loan is advanced to the borrower, or in bulk, where the loans have already been advanced.
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If you require more information or have a bulk insurance request please email us on RMBS@qbelmi.com or contact Adam Darling, Senior Manager, LMI Product & Capital Markets on (02) 9231 7890.