GSE MBS Investors Facing Adverse-Selection Risk as Pricing Improves for Non-Agency MBS
May 25, 2018
Increased demand for non-agency MBS and pricing policies set by the government-sponsored enterprises are prompting some lenders to deliver high-quality GSE-eligible mortgages into non-agency MBS pools. If the trend persists, GSE MBS investors could face risks from adverse selection, according to industry analysts.