December was a slow month for MBS trades but 2019, on average, was quite good. Meanwhile, just when you thought rates might start rising, a monkey wrench or two gets thrown into the works.
Trade groups are wary that any capital rule issued after May could be over-turned if Democrats win the White House and control of Congress in the next election.
GSE recap-and-release work will generate millions of dollars in fees for the lucky advisory firms. In a few weeks, the FHFA is expected to announce its counsel.
Thirteen major financial institutions have agreed to pay a combined $337 million to settle an antitrust lawsuit accusing their trading desks of engaging in a price-fixing scheme for Fannie and Freddie debt.
The key factor for TBA investors is prepayment speeds. A quick scan of the FHFA data show that the conditional prepayment rates for UMBS issued by Fannie and those issued by Freddie have remained comparable since the launch of the single security in June.
The Fannie/Freddie JV in charge of the uniform MBS has a new CEO with a deep background in mortgage finance: Anthony Renzi. In early 2018, he was hired to run the day-to-day operations of Cenlar, the big kahuna of subservicing.
The novelty of prepayment as a primary risk factor is one of the charms MBS have for foreign investors, particularly sophisticated institutional investors. That’s because it has a relatively low correlation factor with other assets.
MBS and MSR investor New Residential signaled that it might engage in a large stock buyback program, but so far there’s been no activity. It’s possible political considerations might be a factor.
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