More than half of Fannie’s MBS flow in November came from refinance loans, the first time since March that purchase mortgages accounted for less than half of its business.

As of September 30, banks and thrifts held $15.50 billion in repurchase reserves, most of it tied to Fannie/Freddie loans.

Bank and thrift MSR holdings peaked at $5.977 trillion back at the end of 2009.

The key factor is that some mortgage originators, the megabanks especially, are keeping conventional loans in portfolio that might otherwise be securitized by Fannie and Freddie.

According to Inside Mortgage Finance, among the top 15 jumbo originators eight are nonbanks.

All three agencies saw double-digit declines in new production, but Fannie Mae experienced the the biggest decline.

The top refi lender through the first nine months of 2014 was Wells Fargo with $38.56 billion, but Quicken wasn’t too far behind at $32.48 billion.

As one West Coast-based mortgage executive told IMFnews: “It can be a very tough space. You need lots of capital."

The sharp increase in industry holdings was fueled by a massive acquisition of credit card ABS by TD Bank...

At the same time, the market share of GSE business has been redistributed toward the smaller lenders.