In the MBS Grapevine this week: The lowest rates ever (maybe) and concerns about future GSE earnings from regulator Mark Calabria. Also, Ginnie Mae seeks committed capital.
MBS investors are keeping a close eye on the auction of Ditech Financial. The troubled nonbank is a top-ranked servicer of Ginnie Mae product. The biggest fear: The company will run out of cash.
All eyes are now focused on the TBA market to see if the new single security from Freddie Mac and Fannie Mae creates the expected bump in liquidity and efficiency.
Freedom Mortgage plans to buy RoundPoint Mortgage. But how will the corporate debt ratings of Freedom be affected? Fitch Ratings, for one, isn’t worried but the purchase price has not yet been publicly disclosed.
A Third Circuit appeals panel held that owner trustees are not responsible for residential MBS losses, given their limited duty under governing contracts.
The trading volume was decent during April but paled in comparison to most other months this year. Meanwhile, investors are worried about the usual: declining interest rates and prepayment rates. And a new wild card has emerged: A possible rate cut by the Fed.
Liquidity does not appear to be a cause of concern for the secondary market agency’s top nonbank issuers despite differences in how liquidity issues are addressed from firm to firm.
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