FHFA quietly increased the cap on the GSEs’ holdings of agency MBS from $40 billion apiece to $225 billion. That’s the same as the cap on their entire retained mortgage portfolios.

Interest rate and spread volatility has declined in recent months. That’s leading to a reduction in potential returns from agency MBS along with a more stable investing environment.

WaFd Bank replacing whole-loan holdings with MBS; solar ABS on downgrade watch; dv01 expands into credit card ABS.