The biggest gain in bank MBS investment over the past year was in agency pass-throughs, up 11.4% from December 2018, although holdings of non-agency securities also climbed 7.4%. (Includes two data charts.)
Two prominent GSE multifamily lenders cut production in the fourth quarter as they adjusted to the new investment limits set for Fannie and Freddie. The new caps are unlikely to constrain GSE business in 2020.
For the first time, Freddie was able to charge a higher average g-fee for new single-family business during the fourth quarter of 2019. Pricing disparity was a key driver in the development of the uniform MBS.
The increase in agency MBS from December to January came from the Ginnie program, which has a slower securitization process than Fannie and Freddie. And some loans may have been held back to benefit from higher loan limits. (Includes two data charts.)