The MBS and ABS markets would experience significant volatility if the federal government doesn’t increase its debt limit. Uncertainty on the outcome is already prompting conservative moves among major investors.
Ginnie reduces minimum required pool size for HMBS; Ares Management to issue non-QM MBS; S&P extends comment period on triple-net lease changes; Stifel builds out agency MBS unit; commercial MBS issuers urged to consider advertising.
While Fannie Mae and Freddie Mac are the dominant outlets for eNotes, other entities are looking to boost adoption of the technology. Ginnie Mae has seen greater enthusiasm for eNotes than anticipated since launching its program in early 2021.
Agency MBS market recovering after dismal 2022; KBRA generally plans to decline reviewing RAC requests tied to switches from LIBOR to term SOFR in the commercial MBS market.
Even though the upfront fee Fannie and Freddie impose on commingled securities has been sharply reduced, some industry watchers argue that it has permanently damaged the market for Supers and REMICs.
Sophisticated pricing models for agency MBS, like the Bloomberg MBS Index, are subject to various sorts of model error. Experts say it takes an expert to know how to use them.
While agency MBS trading typically slows towards the end of the year, the average daily volume of trades in December 2022 was the lowest on record since the beginning of 2020. Banks are showing weak demand for the securities.
With lenders pushing mortgages that include a temporary buydown feature, MBS investors are pondering prepayment behavior for the loans. Expect loans with temporary buydowns to exhibit prepayment speeds similar to ARMs, according to an industry analyst.
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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