Critics argue that, if Fannie Mae and Freddie Mac are released from conservatorship without an explicit government guarantee, MBS investors will demand wider spreads to cover the added credit risk.

Rising mortgage delinquencies increase spreads on residential MBS, as expected, along with spreads on credit card, student loan and auto loan ABS.

More and more industry insiders believe the Trump administration will attempt to release Fannie and Freddie from conservatorship.

Residential MBS transactions will likely experience a spike in delinquencies, but performance will return to pre-storm levels within a year, according to Moody’s.

Fitch Ratings sees relatively smooth sailing for residential MBS this year while times are tough in the CMBS market, and the worst could be yet to come.

The Fed could start cutting rates in June, according to projections by industry analysts. The Fed is also moving toward slowing the runoff of its holdings of Treasury securities and MBS.

Kroll saw a 21.9% increase in non-agency MBS ratings from the third to the fourth quarter, as well as the smallest decline (3.7%) in ABS rating volume. (Includes two data tables.)

Declining multifamily valuations are pushing up capitalization rates while reducing debt service coverage ratios.

Bank of America issued a resecuritization this week tied to a 2017 multifamily K-deal. It’s the first rated issuance of its kind from BofA since 2016. The new resecuritization received an A- rating.

The red-hot vehicle ABS market saw intense competition between S&P and Fitch for ratings supremacy. Kroll rode the resurgent ECM MBS market to boost its share of rated issuance. (Includes two data tables.)