Some large servicers are using securitizations for MSR financing while mid-size and smaller servicers stick with bilateral agreements.

Policies put in place during the pandemic prevent many small banks and credit unions from selling small-balance loans to the GSEs, which constrains mortgage lending in rural and low-income communities.

For MBS investors, the biggest complication in the GSEs’ implementation of VantageScore 4.0 is likely loan-level pricing adjustments.

The value of agency MBS declined sharply following the start of the war with Iran. More recently, volatility has declined, prompting some major agency MBS investors to see continued promise in the assets.

Fannie Mae and Freddie Mac appear to be buying more MBS at times when spreads widen. They’re also hedging the purchases with interest rate swaps, according to industry participants.

The Treasury Market Practices Group released a white paper identifying how a change in the ownership structure of Fannie Mae and Freddie Mac could impact the broader financial markets.

Combining machine learning techniques with more traditional accounting is making it possible to predict both whether a loan will prepay and when.

One of the GSEs has quietly issued an MBS comprised of loans underwritten using VantageScore 4.0.

While depository institutions and the central bank scaled back their MBS holdings during the fourth quarter, money managers, life insurance companies and the GSEs ramped up their portfolios. (Includes three data tables.)

Since the Iran war started, interest rates have returned to where they were when President Trump directed the GSEs to purchase $200 billion in MBS and most analysts say GSE reform is now off the table.