Mortgage Backed Securities on the Rise Again
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Mortgage backed securities are on the rise again. As more people refinance, taking advantage of the low mortgage interest rates, more securities based on mortgage are being sold. Indeed, Freddie Mac has issued (and bought) billions in mortgage backed securities in recent months. National Mortgage News Online reports on this trend:
Freddie Mac’s issuance of mortgage-backed securities totaled $57.7 billion in March — nearly double its activity in February as a result of the surge in refinancings. The mortgage giant purchased $52 billion in refinanced mortgages in March, its largest refinance purchase month since 2003. The company also said it added $45.1 billion in mortgage assets to its investment portfolio, including $19.1 billion of its own MBS. And the mortgage investment portfolio grew to $867.1 billion as of March 31.
It is interesting that these securities remain somewhat popular. Mortgage backed securities have been cited as one of the reasons that the mortgage market collapsed. The hope, however, is that most of the mortgages so packaged are of higher quality than the ARMs, interest only and subprime loans that brought mortgage backed securities down last year.
Unfortunately, the tide of deliquencies has yet to be stemmed. With foreclosure moratoriums coming to an end, defaults are rising again throughout the country. There are concerns that very little will help. The President’s plan is supposed to prevent millions of foreclosures, but implementing the plan is taking some time, and mortgage lenders have to volunteer to participate. Still, there is some hope that soon foreclosures will begin to stop. Of course, if the jobless rate continues to rise, no loan modification plan will be able to stop those foreclosures from taking place.
It will be interesting to see how things go in coming months. At some point, though, the economy will begin its recovery. And when it does, credit will become more available, and the housing and mortgage market will start to pick up steam again.
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[...] Mortgage Backed Securities on the Rise Again Image via Wikipedia Mortgage backed securities are on the rise again. As more people refinance, taking advantage of the low mortgage interest rates, more securities based on mortgage are being sold. Indeed, Freddie Mac has issued (and bought) billions in mortgage backed securities in recent months. National Mortgage News Online reports on this trend: Freddie Mac’s issuance [...] [...]