Fannie Mae and Freddie Mac officials are confident that the single-security will launch successfully in the to-be-announced market next June, although some market participants at last week’s Residential Mortgage Finance Symposium in New York still have some jitters.
A proposal issued by federal regulators last week to ease certain standards for capital and liquidity will likely prompt banks to reduce their holdings of MBS, according to industry analysts. The complex proposal could prompt a $65.0 billion reduction in bank holdings of MBS, according to estimates by the Federal Reserve and Wells Fargo Securities.
So far this year, publicly traded real estate investment trusts that specialize in mortgages have raised $4.8 billion by selling additional shares of stock, on par with what they did all of last year. Now, comes the big question: What are they doing with all that money?
Fannie Mae and Freddie Mac reported $6.72 billion in net income during the third quarter, down 3.5 percent from the previous quarter. The government-sponsored enterprises have also been actively whittling down their retained portfolios.
Redwood CEO Chris Abate: “Our game plan in the third quarter was a bit unconventional – we ran an up-tempo offense, squarely in the face of mortgage market headwinds.”
Increasingly worried about the liquidity of its largest nonbank issuer/servicers, Ginnie Mae is telling this select group of companies to come up with a plan to address what an agency spokesman characterized as “eventualities.” (Includes one data chart.)
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