Banks have retained a significant volume of newly originated jumbo mortgages and even certain conforming loans in recent years, but analysts at Deutsche Bank Securities stress that the “conventional wisdom” regarding bank demand for MBS is wrong. “Despite anecdotal evidence of banks retaining more whole loans – they are more and more reliant on MBS as a percentage of their overall exposure to residential mortgages than they have been at any point in the past 15 years,” the analysts said in a report released last week. Bank demand for MBS holdings has increased...
Credit unions aren’t major players in the MBS market, and their aggregate holdings declined slightly in 2014, according to a new Inside MBS & ABS analysis of call-report data. Credit unions held $101.3 billion of residential MBS in portfolio at the end of last year. That was down 2.4 percent from the third quarter, and off 3.8 percent from the end of 2013. Most of the industry’s MBS holdings (97.4 percent) were...[Includes one data chart]
Jumbo mortgage production last year grew its share of total originations to its highest level since well before the financial collapse that launched the era of the “agency jumbo” loan. Mortgage lenders cranked out a total of $291.1 billion of home mortgages with loan balances exceeding the old conforming loan limit of $417,000. Like everything else in mortgages, jumbo production was down from 2013, by 22.4 percent. But total mortgage originations fell...[Includes three data charts]
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