The Federal Housing Finance Agency in recent years has done a better job than Ginnie Mae in interagency planning for a hypothetical nonbank crisis, according to the Government Accountability Office.

Actions by the Federal Reserve are helping to reduce volatility in the agency MBS market. Investors are comfortable with current conditions, with supply and demand seen as being in balance.

Obstacles like how to deal with the implicit guarantee and excessively high capital requirements make it unlikely that the GSEs will exit conservatorship under Trump, though the chances are higher than before his election.

Mortgage real estate investment trusts can still sell unsecured notes to investors, but it’s not as cheap as it was a few years back.

The debate over how to end the conservatorships of Fannie Mae and Freddie Mac hinges on whether rating services would downgrade the GSEs if they exit without an explicit government guarantee.

The settlement includes $19.4 million in disgorgement of profits the SEC said BMO generated between December 2020 and May 2023 through misleading sales of agency CMOs.

Initial projections suggest MBS backed by collateral in areas affected by the California wildfires will largely be unscathed.

Critics argue that, if Fannie Mae and Freddie Mac are released from conservatorship without an explicit government guarantee, MBS investors will demand wider spreads to cover the added credit risk.

Stifel is telling its clients to reallocate into MBS from corporates. Meanwhile, MBS trades slipped in December but posted a strong year.

Many analysts are projecting increases for issuance of MBS and ABS in 2025. Delinquencies are also expected to rise, though not to troublesome levels.