In his semi-annual testimony before the Senate Committee on Banking, Housing, and Urban Affairs this week, Federal Reserve Chairman Jerome Powell finally put a number to his talk of “normalizing” the central bank’s balance sheet. He described a balance of $1 trillion as “a reasonable starting point, an estimate of where we might end up.”
The Federal Housing Finance Agency late this week issued a final rule aimed at improving liquidity of the to-be-announced MBS as well as the new uniform MBS, which makes its debut in early June.
If you’re wondering about the strength of the MBS and ABS markets these days, consider this: More than 8,000 people attended the SFIG Vegas conference this week, a record for the event, according to officials at the Structured Finance Industry Group.
Commercial banks and savings institutions increased their investment in non-mortgage ABS during the fourth quarter of 2018, though the industry’s appetite for the product remained tepid. [Includes two data charts.]
Lower GSE loan limit not a priority for SFIG; whole loans present alternative to non-agency MBS for investors; jumbo MBS issuance may wane with home price appreciation...
Banks originating non-agency mortgages could better compete with the government-sponsored enterprises if the threshold for appraisal exemptions in case of residential real estate properties is raised, industry participants said.
Records are falling like dominoes in the nonprime mortgage-backed security market. Verus Mortgage Capital last week issued a $664.09 million deal — breaking a volume record set by Angel Oak Companies a month ago.
Prepayment rates on mortgage-backed securities with non-qualified mortgages have slowed due to interest rate trends and a shift in borrower characteristics, according to industry analysts.