Ever since the Fed started its rate-hiking cycle, the spread between interest rates on loans in agency MBS and the 10-year Treasury rate has been elevated. Prepayment risk is to blame and there’s no easy fix.
Loans in a new ABS from Cross River Bank were originated in partnership with Upstart Network. Partnerships with banks provide interest-rate preemption to many nonbank lenders.
The GSEs provided new disclosures on temporary buydowns. Borrowers most commonly take a buydown that lasts no more than two years and usage of the feature is declining amid elevated interest rates.