Desperate times call for desperate measures. But, perhaps, having the GSEs create demand by purchasing (a lot) more of their own MBS in an effort to lower rates is a bridge too far.
Vehicle ABS issuance reached a record $46.5 billion in the third quarter, and that doesn't count rental-fleet financing. But a sharp decline in auto-dealer floorplan securitization led to a slip in business ABS production. (Includes three data tables.)
Industry trade groups have sent letters to the Federal Reserve chair, asking for an end to its quantitative tightening and rate hikes in an effort to reduce mortgage rates and stimulate home sales.
Mortgage rates remain stubbornly high by modern standards with the spread between the 10-year Treasury and MBS showing no mercy. Is there any hope on the horizon for a reprieve? Probably not.
Nonbanks could fund the closing of government-insured mortgages using commercial paper guaranteed by Ginnie and the loans would be pledged as collateral to the commercial paper, former Ginnie President Ted Tozer suggested.
When servicing on auto ABS transferred earlier this year following the failure of two issuers, delinquencies on the deals spiked. Months later, defaults remain well above the levels seen before the transfers.
A lawsuit accusing Moody’s and S&P of fraud and negligent misrepresentation in rating auction rate securities in the runup to the 2008 crisis was dismissed by a New York court last week.
The Department of Energy is providing a 90% guarantee on loans in an ABS from Sunnova Energy. The loans are part of DOE’s new solar program, Project Hestia.
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