Items Tagged with 'Option-adjusted spread'


  • Placing prepayment penalties on the Christmas table

    It's the time of the year in mortgage finance to begin developing our resolutions. After a year that saw more and more money being pumped into the economy it's about time everyone started looking at stimulus options, no matter how small, that don't involve a taxpayer backstop. Indeed, politicians seem to spend taxpayer dollars at will and after a challenging year, 2011 needs to find a period of austerity.
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  • The GSEs Might Save Mortgage Rates After the Fed After All!

    The closely watched pot on my stove for the last six months, otherwise known as the Fed's MBS purchase program, is coming to an imminent end. (If you start here, you should be able to follow my posts on the subject as far back as you like. ) If you are up-to-date on the issues surrounding the Fed's departure (or insist, like an old school journalist, on getting the gist of the whole story in the lead), jump ahead to "Buyouts a Strong Technical." Otherwise, here's the brief:
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  • Viewpoint: Like Us, Whitney Sees Risks in Fed’s MBS Exit

    HousingWire readers have already been reminded on a number of occasions that the Federal Reserve dominates the agency/GSE MBS market (and has since the purchase plan was announced almost a year ago) and that banks and would-be mortgage borrowers are first in line to be whacked when the Fed exits the MBS market. So I was thrilled yesterday when celebrated bank analyst Meredith Whitney put out an industry note that zeroes in on the Fed’s MBS purchase program; She calls the “Great Exit” the biggest market and bank risk over the next four months.
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  • MBS Analysts Watch Fed’s Every Trade

    When and how the Fed will depart the MBS market is no longer a mystery. Following last month’s FOMC meeting, it announced it would purchase the full $1.25 trillion of MBS previously announced, but that it would gradually slow the pace of those purchases “in order to promote a smooth transition in markets.” It “anticipated” the program would be completed by the end of the first quarter of 2010.
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  • Agency MBS Spreads Reach Two Decade High

    The yield spread between agency MBS bonds and 10-year U.S. Treasuries on Wednesday reached a level not seen since 1986, according to a report by Bloomberg's Jody Shenn. The spread is boosting the cost of conforming mortgages for high-quality mortgage borrowers at time when mortgage affordability is a chief concern for many market participants.
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