The New York Federal Reserve purchased $9.81 billion in agency MBS on Monday and Tuesday, in addition to $22.89 billion bought last week. It’s been nearly three weeks since it sold any of its MBS holdings.
By examining how well LIBOR has correlated over time with actual bank funding costs, Federal Reserve economists have demonstrated the London rate is no better at this task than risk-free rates like SOFR.
The Federal Housing Finance Agency said it lacks sufficient data to create statistical models to “reflect economic conditions for 2021” because of the market disruption caused by the coronavirus.
Some industry players believe FHFA Director Mark Calabria wants to use an activities-based review of the market to reduce regulations, which many observers think increase the cost of mortgages.
The Supreme Court is likely to give the president the power to replace the FHFA director for any reason, much like it did in the Seila Law v. CFPB case, according to Cowen analyst Jaret Seiberg.
The panel this week heard testimony that servicers failed to inform borrowers of their right to forbearance, offered less assistance than required by law and provided inaccurate information on lump-sum repayments.
Since the financial crisis, Fannie’s single-family book of business has posted a loss rate of 31.5 basis points. In contrast, residential loans at commercial banks averaged a loss rate of 86 bps, 5.7 times higher.