Spreads on various types of residential MBS are wider than they were during the early days of the pandemic, suggesting that the assets aren’t particularly attractive to investors. However, that isn’t necessarily true.
The REIT has built up strong residential and MSR businesses to diversify risk and support its agency prowess. And while it’s held back on increasing leverage, once volatility declines, all that may change.
While the market value of residential MBS fell in the first quarter, the volume of outstanding securities continued to grow. (Includes two data charts.)
Portfolio holdings of agency MBS fell mostly due to lower market value for the assets. REITs also recorded a significant drop in TBA investments as agency MBS issuance declined. (Includes data chart.)
The Mortgage Bankers Association has asked the SEC to review the margin requirements in Rule 4210, arguing that lenders use to-be-announced securities to hedge their interest rate exposure rather than for speculation purposes.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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