History repeating? Viewing the subprime mortgage crisis through a ESG lens

There is consensus that unfair and predatory lending behaviors were a driving force behind the 2008 subprime mortgage crisis. And when these irresponsible lending practices came to light, so too did the importance of governance for securitized assets such as mortgage-backed securities (MBS). However, with the subprime crisis now 12 years behind us, governance around lending and servicing practices can still fall short, and irresponsible behaviors persist.   

At Yield Book, we are developing an ESG taxonomy for securitized assets, focusing first on crucial areas within governance, namely responsible lending and servicing behaviors. This taxonomy enables quantitative measurement of lending practice responsibility, such that investors can fully understand the risks associated with securitized assets—and engage lenders and servicers to improve their governance.  

Read the full blog post now at the link below