Attendance at the ABS East conference hit a record this week even as industry participants are anticipating a recession. Parts of the ABS market are offering investors better returns than corporate debt.

Nearly 90% of loan liquidations in Ginnie MBS resulted from borrower payoffs in the third quarter, with most of them linked to MBS issued in 2020 and 2021.

Bank demand for agency MBS is weak, leading to wider spreads and losses on MBS holdings for some. Banks are also reducing their lending activity, providing an opening for nonbanks.

Delinquencies are rising on commercial MBS, driven by office properties. Losses are expected to follow and it could be years before the situation improves.

Dimensional Fund researchers argue that MBS pricing is the sum of expected returns and the option-adjusted spread.

Moody’s is reviewing two note classes as part of a downgrade review of the MBS due to an accidental loan prepayment disbursement.

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.