21715
MBS a solution to stressed housing market
Economy, Business And Markets

MBS a solution to stressed housing market

A market expert suggested mortgage-backed securities as an effective financial tool to raise fund for the housing market, in a move to help it overcome current recession and become regulated in consequence.
Hossein Khazali, CEO of Keshavarzi Bank Brokerage, said: “The main problem, which the housing market is struggling with over the past couple of years, is the lack of liquidity, making the supply side face serious difficulties,” IRNA quoted him as saying on Tuesday.  
He said mortgage-backed securities are in line with sharia, noting that with regard to previous global experience in using such securities and tight supervision over their issuance through an appropriate risk-return management, the securities can help better finance Iran’s housing market.
MBS is a type of asset-backed security that is secured by a mortgage or collection of mortgages. The mortgages are sold to a group of individuals (a government agency or investment bank) that securitizes or packages the loans together into a security that investors can buy.
“When you invest in the securities, you are essentially lending money to a home buyer or business,” he said. “It offers a solution to a smaller regional bank to lend mortgages to its customers without having to worry about whether customers have proper collaterals. Instead, the bank acts as a middleman between the homebuyer and the investment markets.”
He said Bank Maskan, the only specialized bank in charge of providing home loans, can take advantage of the securities to finance construction projects, noting that mortgage-backed securities are low risk as they are backed by physical assets, a feature that improves the attraction of such securities to the investors.
“MBS can also be tradable in the Iran Fara Bourse or over-the-counter exchange market, based on specific maturity dates and initial values,” he added.

Short URL : http://goo.gl/Tpdovk

You can also read ...

First Vice President Es'haq Jahangiri on Monday officially...
Exporters and even local traders say they have put everything on hold for now until the dust settles on the new normal.
The foreign exchange market recently went in a frenzy, with...
Jahangiri officially notified the process of repatriation that obligates exporters to return 95% of their currency yields.
When President Hassan Rouhani’s administration decided to...
GM has sought wage concessions from its labor union as well as government funding and incentives to save its remaining three South Korean factories.
General Motors Co’s South Korean unit on Monday said it has...
Snapp, Iran’s First Unicorn Startup?
The widely used ride-hailing application Snapp will pursue new...
Subsidized Currency for Specified Imports
The head of Management and Planning Organization has presented...
Mouteh Gold Output  at 602 kg Last Year
Mouteh Gold Mine produced 602 kilograms of gold ingots during...
Gov’t Weighing Impact of Forex Measures on Trade
The government is assessing the effect of unified exchange...

Trending

Googleplus