New Fed Chair Kevin Warsh has long criticized the size of the Fed’s balance sheet, in particular, its massive holdings of agency MBS.

Rocket Mortgage was the top seller-issuer in April thanks to a 24% jump in monthly volume, while UWM slipped to second place. Newrez, Chase and Onity all posted big gains from March. (Includes two data tables.)

FICO’s CEO argued that VantageScore isn’t gaining much traction in the MBS and ABS markets, and that the only way the score will take share with GSE mortgages will be if lenders game the system.

Policies put in place during the pandemic prevent many small banks and credit unions from selling small-balance loans to the GSEs, which constrains mortgage lending in rural and low-income communities.

Even with strong earnings the GSEs are making little progress on meeting stringent capital levels set during the first Trump administration.

For MBS investors, the biggest complication in the GSEs’ implementation of VantageScore 4.0 is likely loan-level pricing adjustments.

Fannie Mae expanded its portfolio by adding both whole loans and MBS, while Freddie Mac cut whole loans as it added MBS.

The value of agency MBS declined sharply following the start of the war with Iran. More recently, volatility has declined, prompting some major agency MBS investors to see continued promise in the assets.

Fannie Mae and Freddie Mac appear to be buying more MBS at times when spreads widen. They’re also hedging the purchases with interest rate swaps, according to industry participants.

The Treasury Market Practices Group released a white paper identifying how a change in the ownership structure of Fannie Mae and Freddie Mac could impact the broader financial markets.