KBRA said that third-quarter MBS issuance volume didn’t meet its expectations and will drop rapidly in the coming year. Meanwhile, both DBRS and Moody’s noted that performance is stabilizing.
Credit Suisse settles legacy non-agency MBS lawsuit; Fannie and Freddie to publish aligned social disclosures for single-family MBS; bank trade groups seek change in FHFA’s capital treatment relating to access of FHLBs; Ginnie portal to re-open Oct. 25; aviation ABS investors in holding pattern on collateral in Russia.
Despite various penalties for early prepayments, FHFA believes multifamily MBS issued by Fannie and Freddie present risk for the FHLBanks. Fannie thinks otherwise.
With both Fannie and Freddie now issuing green single-family and multifamily MBS, the enterprises have become a favorite for investors seeking environmentally or socially responsible assets.
The key factor for TBA investors is prepayment speeds. A quick scan of the FHFA data show that the conditional prepayment rates for UMBS issued by Fannie and those issued by Freddie have remained comparable since the launch of the single security in June.
The difference between the weighted average coupon on Fannie Mae and Freddie Mac MBS soared to an average of 10 basis points in January, with Fannie pools showing consistently higher spreads. According to a report by Wells Fargo Securities last month, the wide gap may be because Fannie is offering sweeter guarantee-fee buy-up/buy-down deals to some issuers.
Production of new non-agency MBS fell sharply in the fourth quarter, ending a year that still set a post-crisis record for new issuance. [Includes three data charts.]
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