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RAMS - (R)E G I S T E R E D (A)U S T R A L I A N (M)O RTG AG E (S)E C U R I T I E S

Posted by on in RMBS SECURITISATION
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RAMS submission to Financial System Inquiry Australia 9th September 1996

page 14 "The financing of housing through the securitisation of mortgage loans into mortgage - backed securities (MBS) is a complex but growing technique that was introduced to Australia in the late 1980s following several years of development in the United States."

page 15 "Despite significant obstacles to securitisation there was a clear demand from borrowers for new approaches to mortgage lending and a growing pool of investment funds that needed new fixed income alternatives.  The vested interests of the banks in continuing the old ways of lending gave rise to market opportunities for new non-bank institutions. In general, these underlying market conditions have changed dramatically, except for the continuing absence of agencies like FNMA, and the environment has become quite hospitable to the securitisation of mortgages as well as other financial assets."

On page 26 "With the deregulation of financial markets in the ‘ 80s, something of a vacuum was created when major building societies took the opportunity to take up banking licences. Combined with the various bank mergers of the times, this had the effect of once again concentrating mortgage financing into the hands of banks. Nevertheless, their treatment of prospective lenders typically remained paternalistic and condescending. At the same time,deregulation also opened the way for a new and different form of funding for mortgages, in the form of SECURITISATION.... "

READ THE SUBMISSION BY RAMS HERE

http://fsi.treasury.gov.au/content/downloads/PubSubs/000128.pdf  

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  • doyla66
    doyla66 Wednesday, 31 October 2012

    Hi Arree,

    Not entirely sure if the point of your post is that lenders fund their next round of loans from the sale of their previous RMBS, is it?

    If it is, yes, that's how it works all right. I just posted a list of common terms and their definitions and explanations, one of which was 'Mortgage Backed Security' - http://www.investopedia.com/terms/m/mbs.asp#axzz2AlPgYDPB - the process is well described and there is a video which is good to help understand it too.

    Also, there is a more detailed explanation here - http://en.wikipedia.org/wiki/Mortgage-backed_security

    It's good that this topic is being uncovered by title holders (I don't like using the term 'borrower', it's degrading, considering it was my signature that allowed them to create the credit amount out of thin air - in fact I gave them credit!) because when the whole process is demystified, the people will understand what the banks have done and how the whole banking system is one giant ponzi scheme (in my opinion).

  • doyla66
    doyla66 Thursday, 01 November 2012

    comments









    IS THIS AVAILABLE IN AUSTRALIA?
    #1 kowhai 2011-02-21 19:30
    Great study material. A man in the states gets a securitisation audit done on the bank loan (mortgage) document number by an auditor for about $1,500. This is then presented to the court as the bank then has no security over your loan, fraudulent! Got them. Has cleared 4 houses of his own that way. I am waiting to see if it is available in Aus Dianne"

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