Some experts expect MSR trading to top $1 trillion in each of the next three years, surpassing the approximately $900 billion traded in 2022.

With production expenses rising to more than $13,000 per loan, and four straight quarters of negative net income, mortgage lenders struggle to find ways to stay in business.

Fannie and Freddie believe the surge in repurchase requests simply reflects market trends.

MBA Chief Economist Mike Fratantoni cautioned that mortgage originations could face ongoing pressure tied to issues with banks.

The GSEs say the spike in repurchase requests simply reflects the historic volume in 2020 and 2021. Lenders argue there should be something short of a repurchase request for performing loans with minor defects.

Former FHFA Acting Director Ed DeMarco and the American Bankers Association have endorsed releasing the GSEs from conservatorship. Industry observers aren’t optimistic about any moves in the near term.

The new tool is expected to help first-time homebuyers and borrowers from underserved communities who might not have qualified under old-school underwriting.

The announcement comes on the heels of a potential downgrade of the U.S. government amid a debate on the debt ceiling.

Spreads on the latest CRT from Fannie were wider than on the deal the GSE issued in April 2022.

Issues at regional banks will likely slow the economy and have impacts on mortgage lending through the year, according to economists at the MBA. Still, GSE economists suggest that originations could pick up soon.