Ginnie seeing strong demand from foreign investors; non-QM demand particularly strong in MBS market; McCargo lands at Federal Home Loan Bank of San Francisco; CMBS downgraded.

A proposal from FINRA to reduce the timeframe in which trades of MBS and ABS must be reported didn’t sit well with some industry participants, prompting the SEC to take a closer look at the proposal.

Agency MBS investors saw spreads widen in April due to volatility surrounding the Fed. Still, banks are showing demand for MBS and the market is poised for a boost, according to industry participants.

Federal Reserve Governor Michelle Bowman highlighted issues in the proposed rule that impact MBS and ABS.

The role of MBS in housing market bubbles is a sign that the financial sector now drives the real economy rather than the other way around.

Two former members of the Fed’s board called for bank regulators to adjust capital requirements for MBS holdings to better account for interest rate risk.

Bank holding companies reported a solid 5.0% increase in agency MBS held in trading accounts during the fourth quarter. But non-agency MBS and non-mortgage ABS holdings were down. (Includes two data tables.)

The Fed could start cutting rates in June, according to projections by industry analysts. The Fed is also moving toward slowing the runoff of its holdings of Treasury securities and MBS.

Banks, the largest holders of agency MBS among investor groups, aren’t expected to be big buyers this year. Money managers helped to fill the void left by banks last year, but that might not continue into 2024.

Mortgage REITs mostly treaded water in the fourth quarter, although aggregate industry holdings were down slightly from the previous period. (Includes two data tables.)