The Bank Term Funding Program comes in the wake of Silicon Valley Bank incurring losses on sales of MBS at current prices, which it undertook to pay back depositors.
Second-level GSE MBS issuance involving excess spread from servicing increased in 2022. Private-equity firms and real estate investment trusts are among the investors buying excess servicing.
About half of recent loan curtailments have been followed by recasts. For investors in smaller MBS pools, that could be mean a higher weighted average maturity than expected, RiskSpan said in a recent analysis.
CRT transactions from Western Alliance Bank and Pacific Western Bank face scrutiny amid bank failures; impairments on unsecured consumer loans in ABS decline; Credit Suisse and what’s to come.
The failures of Silicon Valley Bank and Signature Bank have put much of the banking system on shaky ground. Lenders with similar balance sheets that are more heavily involved in the mortgage market are under scrutiny.
With a bank liquidity crisis taking seed, some nonbank CEOs started asking a basic question: Are our escrows safe? What about our corporate deposits? Needless to say, it’s been an interesting week.
Some banks hike their use of FHLBank advances when a run on their deposits and the inability to sell their MBS holdings cut into liquidity. This strategy doesn’t seem to work for all banks.
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