Browse articles from all of our Newsletters related to FRB.
February 17, 2017 - Inside MBS & ABS
The chatter about the Federal Reserve shrinking its massive $4.5 trillion balance sheet and its huge $1.7 trillion portfolio of agency MBS has continued in recent days, with one Fed official talking up the idea and another describing how the U.S. central bank plans to do it. Federal Reserve Bank of St. Louis President James Bullard said in a speech last week that the Fed could begin normalizing its balance sheet. The Feds balance sheet has been an important monetary policy tool during the period of near-zero policy rates, Bullard said. Thus far, the Feds Open Market Committee has not set...
February 16, 2017 - Inside Mortgage Finance
Despite some reports of credit access loosening, its harder to get a mortgage today than it was during the housing bubble, according to the Urban Institute. With borrowers being denied at a much higher rate than in the past, lower-credit mortgage applicants are dropping out of the housing market. As access to credit tightened after the financial crisis, many lower-credit applicants were discouraged from applying, the UI study noted. That led to a higher-credit applicant pool, which in turn led to a lower rejection rate. This caused...
February 10, 2017 - Inside MBS & ABS
The average daily trading volume in agency MBS increased to $229.8 billion during January, the second best reading of the past year, and a sign that liquidity is improving, thanks in part to higher interest rates. According to figures compiled by the Securities Industry and Financial Markets Association, the January reading was better than the daily trading averages posted for the past four years, which ranged from a low of $178.0 billion in 2014 to a high of $222.8 billion in 2013. Agency trading volumes peaked...
February 9, 2017 - Inside Mortgage Finance
President Trump late last week signed an executive order laying out his core principles for regulating the U.S. financial system, and giving the head of the Treasury Department 120 days to detail how the current massive regulatory regime measures up. Trumps core principles include fostering informed consumer choices, preventing bailouts, promoting economic growth, tailoring regulations and ensuring regulatory accountability. The broadly-worded order specifies, Nothing in this order shall be construed to impair or otherwise affect ... the authority granted by law to an executive department or agency, or the head thereof. The order was...
February 3, 2017 - Inside MBS & ABS
The Federal Reserves Open Market Committee, as expected, held the line on interest rates this week at its first meeting of 2017, but still presumably stayed on track for multiple increases later in the year. Whats new is a recent resurgence of talk about how the central bank will shrink its massive balance sheet and its huge portfolio of agency MBS and debt, perhaps as early as next year. In view of realized and expected labor market conditions and inflation, the committee decided to maintain the target range for the federal funds rate at 1/2 to 3/4 percent, the FOMC said. It added that committee members expect that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate. The Fed will...
January 26, 2017 - Inside Mortgage Finance
The new administration of President Trump wasted no time in trying to fulfill his campaign promise to roll back the tide of regulation, issuing on the day of his inauguration a freeze on new and pending regulations from executive agencies of the U.S. government. What effect this will have on mortgage lending regulation is unclear, at this point, but its likely to be temporary, industry insiders agree. According to a memo issued by White House Chief of Staff Reince Priebus, unspecified executive departments and agencies were...
January 20, 2017 - Inside MBS & ABS
The residential MBS market is expected to be healthy this year, according to some ratings service analysts. But the new president is the big unknown, market participants say. According to analysts at Fitch Ratings, the rating outlook for U.S. RMBS they rate is auspicious, as they expect asset performance trends to stay positive thanks to support from solid, if somewhat uneven, gains in home prices. Although a number of legacy transactions continue to face negative rating pressure due to declining loan counts and tail risk, rating upgrades outnumbered...
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