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.

Since the U.S. initiated strikes on Iran, mortgage rates and MBS spreads have given up all the ground they gained from the Trump administration’s directive for the GSEs to purchase $200 billion in agency MBS.

Most mortgage REITs took advantage of strong MBS fundamentals to increase their agency holdings in the fourth quarter. While some REITs are drawn to the surging non-QM sector, industry holdings of non-agency MBS fell last year. (Includes two data tables.)

The potential rule change would allow banks to redesignate MBS holdings from held-to-maturity to available-for-sale.

The top four bank investors in residential MBS reported a combined $16.5 billion decline in their portfolios during the fourth quarter, with most of the drop coming in GSE pass-throughs. (Includes two data tables.)

Pending proposals from the Fed would impact MBS market; Moody’s looks to rate securitizations of home equity loans.

Republicans are poised to introduce a bill that would codify reforms of the GSEs that have been completed administratively. The bill would also establish a utility model framework for Fannie Mae and Freddie Mac and alter how calculations are made to annual changes in loan limits.

Fannie Mae and Freddie Mac appear to be using aggressive pricing at the cash window to boost whole loan purchases, then retaining the most attractive coupons.