Fed’s Ginnie MBS Purchases Decline

The Federal Reserve Bank of New York on Thursday announced another $19.87 billion in agency mortgage-backed security purchases for the week ending Feb. 18, bringing the total amount of purchases since Jan. 5 to $134.83 billion. The Fed purchased $7.92 billion from Freddie Mac (FRE), $10.95 billion from Fannie Mae (FNM) and $1 billion from Ginnie Mae, making the week ending Feb. 18 the single slowest week in Ginnie purchases, with the week ending Feb. 11 coming in at a close second of $1.4 billion. The Fed has so far purchased $65.8 billion from Freddie, $56 billion from Fannie and $13 from Ginnie. In the week ending Feb. 18, the Fed purchased $850 million in agency coupons with 15-year maturities. The rest of the weekly purchases occurred in coupons with 30-year maturities. Of the Fed’s total purchases so far, approximately 94 percent have been purchases of agency coupons with 30-year maturities. About 5 percent have been purchases of coupons with 15-year maturities, and just under 1 percent has consisted of purchases of coupons with other maturities — 20- and 40-year maturities, for example. The Federal Reserve in early February announced it had selected JP Morgan Chase & Co. (JPM) as custodian for the program, which began on Jan. 5 and will purchase up to $500 billion in MBS that are backed by government-sponsored entities, in an effort to maintain liquidity in a vital section of the U.S. mortgage market. The Fed has also said it may soon begin modifying mortgages it owns within the assets it owns. Write to Diana Golobay at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.