With an eye toward attracting more mature ESG investors from Europe, Fannie and Freddie updated their Mission Index scoring.

Declining multifamily valuations are pushing up capitalization rates while reducing debt service coverage ratios.

The GSEs’ social disclosures should be as granular and specific as those reported for credit-risk transfer deals, according to investors.

With lenders pushing mortgages that include a temporary buydown feature, MBS investors are pondering prepayment behavior for the loans. Expect loans with temporary buydowns to exhibit prepayment speeds similar to ARMs, according to an industry analyst.

Freddie Mac issued 84 green single-family mortgage-backed securities in 2021 that save 192,168 million BTUs of energy per year.

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.