A Structured Finance Association white paper finds the implementation of CRT programs nearly doubles the ROC for Fannie and Freddie.

The difference between interest rates on non-QMs in MBS and the interest rate paid to investors in the securities is helping to protect investors from losses. Excess spread in the sector increased as seasoned loans were repackaged.

Examiners at the Fed and other financial regulators will be on the lookout for banks that aren’t prepared for the transition to SOFR.

MBS and ABS face multiple physical and transition risks from climate change over the short, medium and long term, said panelists at the annual Structured Finance Association conference.

Auctions of early buyouts from Ginnie MBS continues apace. One way to enter the market: Buy the mortgage servicing rights instead.

GSEs see sharp declines in both short-term and long-term debt as the impact from the pandemic ebbs.

A handful of MBS and ABS have incorporated blockchain in a limited fashion. Proponents of the technology suggest that it will improve efficiencies and decrease costs.

Changes to underwriting standards and home price appreciation helped investors in non-agency MBS largely avoid losses during the pandemic. By comparison, cumulative losses on subprime MBS during the financial crisis of 2008 hit nearly 20%.

Several classes of ABS have performed better than expected during the pandemic, including oil and gas assets, airline loyalty programs and retail credit cards.

Although only $4.5 billion of TALF funding was requested during the facility’s pandemic-related course, the Federal Reserve program is credited with stabilizing the ABS market.