Investors aren’t tiering issuers/deals, fraud is a risk with cash-out DSCR mortgages, jumbos in expanded-credit MBS prepay faster than traditional expanded-credit mortgages and investors are getting aggressive with bids for GSE-eligible mortgages.
A flood of investor capital is driving the transformation of relatively illiquid credit portfolios into more liquid structured transactions that can fetch better ratings.
GSE MBS investors were frustrated with limited communication from the Trump administration even before FHFA Director Bill Pulte was named acting director of national intelligence this week. The appointment prompted more speculation about the future of the GSEs.
Although President Trump directed the GSEs to purchase an additional $200 billion in agency MBS, they do not appear to be on track to accomplish that by year end.
Sylvain Raynes, the new lead of the structured finance practice at Egan-Jones Ratings Company, warned that MBS and ABS investors are losing money if they’re relying on fairly static ratings from other firms.
A superior court decision centered on a bank-fintech partnership rejected the state’s argument regarding the “true lender,” providing protection for secondary market participants.
Kroll Bond Rating Agency said the One Big Beautiful Bill Act’s changes to federal student loans for graduate students will likely create a structural funding gap and shift loan demand toward private lenders, with production flowing into ABS.