FRB

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December 2, 2016 - Inside MBS & ABS

Rate Shock Doesn’t Portend Well for Bank, Overseas Investors in MBS, Analysts Say

Analysts at Wells Fargo Securities worry that the post-election rate shock is not a positive omen for bank and overseas investors in MBS. “Since the U.S. presidential election, the 10-year yield has sold off by 55 basis points in a matter of two weeks,” they said in a recent client note. “Although banks and overseas investors are typically looking to buy on dips, large selloffs do not bode well for demand from these investors right after a rate shock. For banks, a large rate shock results in a hit on their regulatory capital.” According to their calculations, during the week ending Nov. 9, 2016, the net realized gains on bank portfolios declined...


December 2, 2016 - Inside MBS & ABS

MBS Prices Continue to Dive as the Rates Climb; FNMA 3.5 Replaces the 3.0 as the Benchmark

The average daily trading volume in agency MBS hit a yearly high of $224.4 billion in October, according to figures compiled by the Securities Industry and Financial Markets Association. With liquidity improving, the year-to-date average now stands at $206.6 billion, compared to $198.7 billion in 2015. The November reading should be out by the end of next week. Investors might be...


November 23, 2016 - Inside MBS & ABS

Movement in Interest Rates Still Depends on Economic Data, Fed’s Yellen Tells Lawmakers

An increase in interest rates could take place “relatively soon,” if incoming economic data warrant it, Federal Reserve Chair Janet Yellen told members of Congress last week. Then again, maybe not. The Fed has held off...


November 18, 2016 - Inside MBS & ABS

President Trump Likely to Push Fed to Normalize; MBS, ABS, Credit Risk Transfers Also Affected

Investors are trying to make sense of the new political/economic landscape following the election of Donald Trump to be the next president, and how best to navigate his uncertain, and at times contradictory, signals during his campaign. Much of the conversation over the last week has focused on the likely effect the new regime will have on the Federal Reserve and its chair, Janet Yellen. Trump, who has been a fierce critic of the U.S. central bank, has indicated he won’t outright replace Yellen, but neither will he nominate her for a second term. And of course, what happens with the Fed will spill over, one way or the other, into the financial markets. “The Fed will normalize...


November 4, 2016 - Inside MBS & ABS

It’s Now December or Bust for a Rate Hike This Year As FOMC Holds Interest Rates Steady as in 2015

The Federal Reserve’s Open Market Committee appears to be repeating last year’s story line of promising multiple increases in interest rates at the start of the year, only to delay and delay until the final month, when it finally raised rates a bare minimum of 25 basis points. This month, the Fed passed on another opportunity to raise rates and suggested to many in the market that it finally will ratchet the federal funds target rate up a notch at its final meeting of the year in mid-December. The FOMC said the labor market has continued to strengthen and economic activity has picked up from the modest pace seen in the first half of this year. “Although the unemployment rate is little changed in recent months, job gains have been solid,” the committee said. Meanwhile, household spending has risen...


October 21, 2016 - Inside MBS & ABS

MBS Trading Volume Hit a Yearly High in September. Prepays Ebb as Investors Ponder Next Fed Rate Hike

The average daily trading volume of agency MBS hit $223.2 billion in September, the strongest reading of the year and a sign that liquidity in the market has improved. According to figures compiled by the Securities Industry and Financial Markets Association, daily trading volume increased by 17.7 percent compared to the same month a year ago. But the year-to-date averages are much closer: $206.6 billion for 2016 compared to $199.9 billion last year. In the agency space there is...


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In 2016, what have you been paying your retail residential loan officers, on average, as a commission?

25 to 50 basis points per loan
51 to 75 bps
76 to 100 bps
101 to 150 bps
More than 150 bps
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