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A BlackRock Inc fund this month will begin financing U.S. home loans customized for a new breed of residential mortgage-backed securities that avoids the conflicts tainting many of today's private issues.
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The $1 billion BlackRock Mortgage Investors Fund will provide capital for prime "jumbo" loans through lenders under strict underwriting guidelines, said Randy Robertson, a managing director and co-head of securitized products.
The loans will be earmarked for bonds akin to Wall Street's private-label RMBS that provided the majority of credit at the peak of the housing boom. But BlackRock says it is addressing the weaknesses of the old model that have frustrated investors, including sloppy loan documentation and potential conflicts when the same bank is originator and servicer.
"We're really designing this to alleviate many of those concerns," Robertson said. "We hope to achieve the bellwether non-agency prime securities, ultimately."
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