With the Fed’s exit from the market and the push for shorter durations at banks, industry participants ponder what price agency MBS will clear at and what it will cost homebuyers.
Fannie and Freddie reduced the fee for commingled collateral in Supers starting in April, and new issuance showed more diversity — but nothing like the levels before mid-2022. (Includes two data charts.)
If the federal government doesn’t increase its debt ceiling in the near term, payments to investors in MBS and ABS will largely still continue as usual, according to DBRS. But there are significant risks in terms of borrower performance.
In a recent trip to Asia, Ginnie officials assured investors that the structure of Ginnie MBS will help to protect them from any potential issues tied to a possible U.S. debt default.
FHFA is looking to reduce capital requirements for the GSEs’ issuance of commingled securities. Some are happy with the agency’s plan, while others argue that no capital requirements are necessary.
The fact that nonbanks dominate the Ginnie Mae servicing business does not rest well with some in Washington, DC. Is it time to create a backstop for the Ginnie MBS market just in case?
With the U.S. debt ceiling resolution far from certain, investors in agency MBS are being careful in terms of financing and leverage. A U.S. default also has ramifications for outstanding MBS and ABS.
Owners of scratch-and-dent mortgages, especially nonbanks, can’t hang onto these problematic loans forever. The good news: Sellers are more likely to accept bids this year.
Banks have gone from being reliable buyers of agency MBS to cautious holders of the securities, prompting wider spreads and opportunities for nonbank investors.