Market Effects of GSE Portfolio Caps Debated, But MBS Participation Likely to be Considerable
August 11, 2006
Most observers don’t expect the portfolio restraints recently imposed on Fannie Mae and Freddie Mac will have a major impact on the MBS market. Both Fannie and Freddie have reached agreements with the Office of Federal Housing Enterprise Oversight to restrain growth in their retained portfolios until they become current in their financial re-porting. Not growing doesn’t mean not buying, however, as both companies experience a substantial...