Non-agency MBS was the fastest-growing niche in residential securities during the second quarter as outstanding volume reached its highest level since 2017. (Includes two data tables.)

Annaly Capital Management remained the biggest REIT MBS investor at midyear, although AGNC had the largest portfolio of agency MBS. REIT holdings of non-agency MBS declined. (Includes two data tables.)

With the Fed widely expected to reduce the federal funds rate next week, demand for agency MBS is rising. Banks are also projected to add to their holdings, though their buying might be somewhat delayed.

KBRA downgrades jumbo MBS issued by JPMorgan Chase in 2015; Community Bank sells MBS holdings at a loss; Morningstar details private-rating share.

The second quarter brought a big increase in bank holdings of Ginnie Mae pass-throughs. Banks reduced their investment in GSE pass-throughs but upped their agency CMOs. (Includes two data tables.)

Key mortgage industry stakeholders say an IPO of GSE stock would have trouble attracting investors if FHFA remains their conservator or they are released without an explicit guarantee.

If MBS values are poised to increase, now might be a good time for REITs to raise cash and buy securities on the cheap.

Mortgage rates and MBS spreads may depend on how the White House structures the proposed IPO for the GSEs and how markets react to a potential merger of the two mortgage giants.

Issuers are looking to create spec pools of FHA loans to help reduce default risk.

President Trump said he plans to maintain an implicit guarantee for the GSEs if they’re removed from conservatorship. Prominent agency MBS investors expressed relief about the administration’s stance on GSE reform even though they don’t expect near-term action.