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.

FHFA quietly increased the cap on the GSEs’ holdings of agency MBS from $40 billion apiece to $225 billion. That’s the same as the cap on their entire retained mortgage portfolios.

Interest rate and spread volatility has declined in recent months. That’s leading to a reduction in potential returns from agency MBS along with a more stable investing environment.

WaFd Bank replacing whole-loan holdings with MBS; solar ABS on downgrade watch; dv01 expands into credit card ABS.