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Then and Now: Mortgage-Backed Securities Post-Financial Crisis

By Advisor Perspectives
Capital Markets, Financial Services

A little over 10 years ago, few people had heard of mortgage-backed securities (MBS). Yet that changed when MBS brought the global financial system to its knees. Today, they’re still a pivotal part of the system, with the US Federal Reserve (Fed) the largest holder. Franklin Templeton Fixed Income Group’s Paul Varunok explains how MBS fit into the Fed’s future plans and gives his outlook for the asset class.

Ten years ago, the United States was in the depths of a financial crisis that is still a sensitive topic for many borrowers who lost their homes and for many investors who saw their portfolios fall as the crisis spread across the globe.

Before the crisis, the United States hadn’t experienced a national housing correction in at least four decades.1 Many groups, including homeowners, mortgage originators and credit rating agencies, seemed to discount the possibility that home prices would fall.

Read more at Advisor Perspectives.

Photo: valor kopeny

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