Despite a presidential directive to buy more MBS, the GSEs’ combined MBS holdings have declined for three straight months.

Most of the increase in banks’ MBS investment was in Ginnie Mae pass-throughs, which grew a modest 1.5% from the first quarter. Holdings of non-agency securities declined. (Includes two data tables.)

Industry observers don’t expect the move to prompt major declines in interest rates this year.

Many of those green loans will still be eligible for purchase by the GSEs. Social bonds appear unaffected.

The Structured Finance Association says the GSEs should be able to accept multiple credit scores on a single application and disclose that information to MBS investors.

Investor demand is expected to remain strong for agency MBS despite some volatility expected for the rest of the year.

The Trump administration has provided little guidance on how the GSEs will achieve their goal of purchasing $200 billion of agency MBS. Still, actions by Fannie and Freddie have helped competing agency MBS investors get comfortable with activity by the mortgage giants.

While FICO and VantageScore debate whose new credit score model performs best, industry insiders say the transition to new scoring models may take years.

In May, the combined retained mortgage portfolios of Fannie Mae and Freddie Mac saw their first monthly decline in more than a year.

SFA and other trade groups are seeking major changes to the re-proposed bank capital requirements. MBA raised concerns that non-agency MBS would receive more favorable capital treatment than GSE MBS.