The impact of COVID-19 regulatory measures on RMBS

This note outlines the impact of COVID-19 regulatory measures on UK residential mortgage-backed securitisation transactions. The sum effect of the UK regulatory measures to date suggests that UK securitisation transactions backed by UK residential mortgage loans may require review and/or amendment in order to (A) comply with the FCA guidance including any amendments required to the servicing agreements to allow for the granting of payment holidays or the updating of servicing policies and procedures to reflect the principles set out in the FCA guidance; (B) clarify whether UK mortgage loans subject to payment holidays are eligible assets; (C) implement enhanced transparency measures to track the development of mortgage loans subject to COVID-19-related relief; and (D) clarify whether arrears and default calculations exclude loans subject to COVID-19-related relief.

See our Coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.