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. 

Servicers will now have a shorter wait time to deliver reperforming loans back into Ginnie MBS, and the loans will no longer have to go into special RG pools. The changes are aimed at increasing liquidity for Ginnie issuers. (Includes data chart.)

The performance of MBS and ABS isn’t expected to be directly impacted by the fallout of Russia’s invasion of Ukraine in the near term; prepayment rates on agency MBS declined in February.

Both the new capital rule and updated eligibility requirements for GSE seller/servicers could affect participants.

Borrowers with loans in various types of MBS and ABS could be stretched as interest rates increase, according to industry analysts. Prepayment rates are also likely to slow.

Loan payoffs through refinancing and the like declined during the fourth quarter while buyouts plummeted. On an annual basis, loan removals were largely flat. (Includes data chart.)

Analysts at Keefe, Bruyette & Woods expect prepayment rates on agency MBS to decline further in 2022 as fewer borrowers have incentives to refi.

Despite various penalties for early prepayments, FHFA believes multifamily MBS issued by Fannie and Freddie present risk for the FHLBanks. Fannie thinks otherwise.

After a slight blip higher in early-stage delinquencies in November, late-payment rates fell in December for all three agencies. (Includes data chart.)

If the coronavirus continues to wreak havoc and the federal government doesn’t provide additional stimulus, the performance of residential MBS is expected to take a significant hit.