DBRS Publishes Primer on Second-Lien Mortgage Securitisation

DBRS Ratings Limited (DBRS) published a commentary examining the possibility of further second-lien securitisation and reviewed the potential risks of subordinated mortgage debt.

The second-lien mortgage market in the UK has undergone a significant expansion over recent months. In the 12 months to July 2017, aggregate second-charge advances exceeded £950 million for members of the Finance and Leasing Association. A growing second-charge mortgage market is a contributing factor to the rising levels of household indebtedness in the UK.

The second-lien sector has been regulated by the Financial Conduct Authority since March 2016. This has possibly contributed to the expanding volumes, as a result of an associated increase in credibility and mortgage broker awareness of the second-lien products on offer.

A copy of this commentary is available free of charge by contacting us at info@dbrs.com or online at www.dbrs.com