The biggest gain in bank MBS investment over the past year was in agency pass-throughs, up 11.4% from December 2018, although holdings of non-agency securities also climbed 7.4%. (Includes two data charts.)
Banks will no longer have to meet extensive disclosure requirements for their MBS deals to receive investor-friendly protections. The change was met with criticism from an Obama appointee to the FDIC’s board.
As the industry moves from LIBOR to SOFR, the ARRC is seeking input on whether the spread-adjustment methodology for cash products should be consistent with what’s adopted internationally for derivatives.
Deals backed by seasoned loans still accounted for over half of last year’s non-agency MBS issuance, but securitization of newly originated prime and expanded-credit mortgages more than doubled in 2019.