With primary-market rates topping 7% in August, the outlook for agency single-family MBS production is not favorable. A clutch of nonbanks continues to dominant issuance. (Includes two data charts.)
Despite 15 months of balance sheet reduction, at the current pace, it will still take the Federal Reserve nearly four and a half years to bring its holdings of MBS and Treasuries down to pre-pandemic levels.
These are trying times in the residential finance market. Mortgage rates are high, bond prices are falling and there’s a concern about a lack of MBS buyers. What to do? Let the Fed know how mad you are.
The New York-based financial firm admitted to providing false pricing information to residential MBS clients between 2009 and 2013. It also agreed to cooperate with investigations into former employees.
Ginnie once again ranked as the top agency issuer in July, but all three agencies saw declining volume in purchase and refi business. (Includes two data charts.)
If the proposal is implemented, some mortgage originations that have gone into bank portfolios would likely go into MBS instead. The impact on bank investment in MBS and ABS looks to be much more modest.
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