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.]
After having initially been brushed off as unnecessary, a pilot program that allowed Freddie Mac and Fannie Mae to help finance single-family rental activity is now being hailed a success.
Seasonal factors slowed production of Fannie Mae and Freddie Mac MBS during the fourth quarter, although the refi sector showed some resilience in cash-out transactions. [Includes three data charts.]
Residential mortgage securitization rates edged higher in the third quarter of 2018 but remained below the peak levels set in the aftermath of the financial crisis. [Includes one data chart.]
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