Beginning in December, the Federal Reserve will adjust its balance sheet strategy and no longer reinvest proceeds from payoffs of agency MBS into more MBS.

Trade groups representing smaller lenders called on the Trump administration to prompt the GSEs to increase their holdings of MBS as a way to reduce mortgage rates.

Fed still working toward a Treasury-only balance sheet; BlackRock, Hoplon units partner to bring in new ABS issuers; ABS East set for record attendance; CREFC adjusts plans for DC symposium.

In the early years of Fannie/Freddie conservatorship, investors were seeking an explicit guarantee of GSE MBS as part of any reform effort. More recently, they have shown an acceptance for maintaining an implicit guarantee.

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.