Commercial banks and savings institutions held a combined $1.844 trillion of single-family MBS in their investment portfolios at the end of 2017, a modest 0.3 percent increase from the previous period, according to a new Inside MBS & ABS ranking and analysis.
MBS backed by expanded-credit loans increased by more than 400 percent last year, with an even better year anticipated in 2018. And although the growth in terms of dollar volume wasn’t huge, due diligence firms are beginning to feel bullish about their prospects.
A three-judge appellate court panel late last week ruled that federal regulators improperly set risk-retention requirements for managers of collateralized loan obligations. The ruling overturned a decision by a lower court but won’t take effect immediately as the federal government could appeal.
New jumbo MBS from Redwood Trust are coming fast and furious after a lull in the fourth quarter of 2017. The real estate investment trust has multiple execution options for the jumbos it aggregates and MBS issuance now looks to be providing better returns than whole-loan sales.
The consumer credit cycle seems to be weakening, given current credit trends in consumer ABS, analysts at Wells Fargo Securities said in a new report. They see the solution as being broad economic growth.
Fannie Mae and Freddie Mac this week reported a combined loss of $9.4 billion for the fourth quarter of 2017, a direct result of the Tax Cuts and Jobs Act and its impact on their deferred tax assets. The two government-sponsored enterprises had to reduce the value of the DTA by $10.2 billion.
All totaled, the new tax law will result in Treasury – which owns the senior preferred stock of the GSEs – forking over $4.01 billion to aid Fannie and Freddie...
Prior to release of 4Q17 results, the GSEs had an “account balance” of $103.0 billion with Uncle Sam: $291.4 billion of dividends paid to Treasury versus $188.4 billion of assistance received.
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