The agency MBS market is on track to securitize over $2 trillion of refinance loans and $1 trillion of purchase mortgages in 2020. Nonbanks accounted for over 70% of new issuance in recent months. (Includes two data charts.)
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The use of LIBOR as an index is slated to end in just under 13 months but the benchmark administrator has other ideas. One issue: legacy contracts.
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Performance on non-agency MBS has improved after the spike in late payments seen in the spring. However, borrowers who are still delinquent could prompt losses for investors.
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The FHFA’s capital requirements include relatively harsh treatment of credit-risk transfer transactions from Fannie and Freddie but that view could change under the Biden administration.
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Fannie’s new REMIC election for its multifamily MBS will not change their basic structure. The asset will remain as a single-class pass-through security is-sued through a trust agreement.
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Democrats said the Treasury’s decision to end the TALF facility at the end of the year was a political move to prevent the incoming Biden administration from stabilizing the economy.
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