Ginnie Mae MBS issuance finally caught up to sharp declines in primary-market originations, while ECM securitization was buoyed by more-seasoned loans.
The biggest gain was in agency single-family MBS, as several large bank holding companies boosted their trading portfolios by $1 billion or more during the first quarter.
The top five lenders in the first quarter — four nonbanks and a large regional bank — reported a combined 7.7% decline in mortgage production from the previous period. That was roughly half the rate of decline in the overall market. (Includes two data charts.)
Money-market funds and other investors helped to fill some of the void in the MBS market as the Fed and banks reduced their holdings in the first quarter.
Money-market funds were the most aggressive buyers of MBS during the first quarter, and analysts think demand from the sector will last. (Includes three data charts.)
Banks continued to build their retained mortgage portfolios, but mostly with fixed-rate mortgages, while borrowing costs rose significantly. The agency MSR market is slowly shifting toward higher-coupon loans. (Includes three data charts.)