One trade group source had this to say about the arrangement: “There’s no g-fee break? Then it doesn’t sound like front-end coverage that helps lenders.”
According to Treasury Department reports, overseas investors held $821.3 billion of Fannie, Freddie and Ginnie MBS at the end of June, a 5.0 percent increase from March.
Foreign investors, commercial banks and mutual funds all beefed up their holdings of agency MBS during the second quarter of 2016, according to a new Inside MBS & ABS analysis. The Federal Reserve remained the biggest investor in the agency MBS market with $1.744 trillion on its books at the end of June. That accounted for 29.7 percent of the $5.867 trillion of single-family agency MBS outstanding at that time, but it was down 0.5 percent from the end of March. The central bank’s MBS holdings vary slightly in the Fed’s weekly snapshots as pending transactions wait to clear, but its game plan is to hold its portfolio steady by reinvesting principal payments. The single-family agency MBS market grew...[Includes two data tables]