MBS creation took off like a rocket in the second quarter and the way lenders are feeling today the good times should last for a few more months at least. But there is a downside: prepayment speeds.
Bullish signs abound for non-QM securitizations. Top-ranked lenders Angel and Citadel Servicing Corp. are coming off record originations for 2Q19. Angel Oak believes the market is underestimated.
The Wall Street trade group cautioned that releasing the GSEs from conservatorship without an explicit government guarantee will scare investors and reduce the liquidity in the TBA market.
Declining interest rates helped fuel a securitization boom at Fannie and Freddie in the second quarter. However, falling rates will force writedowns tied to derivatives.
Issuance of agency MBS during April-June rose 43% from the first quarter of the year, with gains posted across the board. Combined issuance by Fan-nie Mae, Freddie Mac and Ginnie Mae hit $330.65 billion.
Grapevine: Declining interest rates can cause MBS investors to fret over prepayment speeds, but several players are using the reduction to sell debt, issue new stock and engage in buyback programs.
It's not everyday that an MBS-investing REIT weighs in on GSE reform, but then again, Annaly Capital Management isn't just any REIT — it's the nation's largest. Bottom line: Annaly wants more MBS guarantors.
FHFA Director Mark Calabria continues to push for the mortgage market to have multiple guarantors to compete against Fannie Mae and Freddie Mac. But Moody's believes there are huge risks in such an endeavor.
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