Proposed reforms of Fannie Mae and Freddie Mac could spur a revival of the U.S. residential mortgage-backed securities market, according to Fitch Ratings. The proposals also call for, among other things, the development of national servicing standards, refining servicing compensation practices and increasing disclosure regarding the existence of second liens, all which Fitch says are “long-term positive for RMBS investors.” Each of these proposals can be “a potential catalyst for an eventual increase in issuance of private label U.S. RMBS,” says Kevin Duignan, group managing director at Fitch.

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