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Volume 2014 - Number 1

January 3, 2014

Jumbo MBS Execution Dominated by Fed’s QE

The Federal Reserve’s asset purchases will continue to dominate execution of jumbo mortgage-backed security issuance until the significant purchases of agency MBS are stopped, according to analysts at Bank of America Merrill Lynch. The tapering of the Fed’s quantitative easing beginning this month will do little to end the advantages agency MBS have over new jumbo MBS. “We believe that the Fed’s ‘non-economic’ bid for agency MBS contributes to the distorted price advantage for agency MBS ...

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With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.


No. It’s still difficult compliance/regulatory-wise.


Maybe. It’s under consideration.


Not now. But things could change as 2018 progresses.