The credit quality of collateralized loan obligations is expected to further deteriorate in the coming months, even though corporate issuers are stabilizing, according to the rating services.
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 GSEs took hits to their net earnings as a result of hedging losses for the third straight quarter. The launch of the uniform MBS pushed Fannie and Freddie into an indemnification agreement.
Production of new MBS and ABS fell in almost every category during the first quarter of 2019, but several markets showed rebounding volume in March, a new Inside MBS & ABS analysis shows. Preliminary estimates indicate that a total of $310.04 billion of MBS and ABS was issued in the first three months of 2019, a 10.3% decline from the previous three-month period. It marked the softest quarter in new issuance since the April-June cycle ... [Includes three data charts]
The average daily trading volume in agency MBS totaled $229.9 billion in February, an 8.5% sequential decline from the previous month, according to figures compiled by the Securities Industry and Financial Markets Association.
New production of agency single-family MBS fell for the sixth month in a row in Febru-ary, sinking to the lowest monthly output in nearly five years. [Includes two data charts.]
The average daily trading volume in agency MBS spiked northward in January, increasing 18.3% on a sequential basis, according to figures compiled by the Securities Industry and Financial Markets Association.
The overall mortgage securitization rate fell slightly in 2018, with 70.0% of home loans originated in the primary market ending up in MBS pools, according to an Inside MBS & ABS analysis. [Includes one data chart.]
Fannie Mae and Freddie Mac racked up $25.19 billion in combined net income in 2018, their most profitable year since 2013, when earnings were inflated by accounting rules for deferred tax assets. [Includes one data chart.]
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