“The potential for growth of the sector is massive,” said Sainadh Polisetty, a senior vice president of investments at One William Street Capital Management.

Analysts predict that a rate cut later this month could be as high as 50 basis points.

The outlook for Fed action is largely positive for MBS investors, with interest rate volatility expected to decline. Still, rate cuts will introduce a risk that has been limited for years: prepayments.

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Originations of both non-agency and conforming jumbo mortgages increased in the second quarter. Combined, they accounted for 16.1% of first-lien originations. Meanwhile, home price appreciation is slowing. (Includes three data tables.)

The Federal Reserve is widely expected to reduce the federal funds rate on Sept. 18. The initial rate cut is already priced in to mortgage rates.

Locks for rate/term refis doubled in August compared with July.

The discount applies to most types of refis, through Oct. 31.

The Loan Store acquired Homepoint Financial’s wholesale lending operations last year.

The Fed's anticipated rate reduction is already baked into mortgage interest rates...