While the Fed is moving away from purchases of agency MBS, portfolio managers at PIMCO believe additional purchases are warranted. In the meantime, the GSEs are increasing their investments.
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.
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.
Mortgage rates and MBS spreads may depend on how the White House structures the proposed IPO for the GSEs and how markets react to a potential merger of the two mortgage giants.
It may take time for MBS investors to fully understand how use of the new credit score for underwriting loans sold to the GSEs impacts pricing and hedge strategies.
Changes to Common Securitization Solutions, including being renamed U.S. Financial Technology, appear to set the company up to serve additional secondary mortgage market participants.
Banking regulators proposed modifying the enhanced supplementary leverage ratio that applies to large banks. If implemented, it could lead to the banks to increase their holdings of Ginnie Mae MBS.
In the wake of Trump’s social media posts pledging to retain the implicit guarantee for GSE MBS, industry analysts see signs for support for the administration’s plans for GSE reform.
President Trump attempted to mollify concerns about the post-conservatorship guarantee of GSE MBS, but questions remain about the regulatory treatment of those securities and the TBA market.
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