MBS

The marketplace has a large appetite to acquire risk-adjusted rental product. Investors see tailwinds leading to a revitalization of SFR capital markets by yearend.

New loan acquisitions fell to their lowest level since 2020, but companies also grew shares of residential securities noticeably over the past three years, S&P Global Market Intelligence said.

An 18-month transition period will end on July 31 for adoption of the Single Family Pool Delivery Module.

The investor segment will have to be mindful as it gains ground, executives said Tuesday, noting that the sector takes experience, skill and savvy awareness of risks.

Home price overvaluations over 10% are easing in some markets, analysts say, but RMBS investors are still cautiously tightening liquidity amid uncertainty.

After a selloff toward the end of 2022 when it sought to reduce liquidity risk, the company resumed purchases of whole loans last quarter.

In an earnings call, the company said talks with depository institutions were already underway regarding potential residential loan sales.

Truist Financial Corp. plans to stop sales and trading of mortgage-backed securities and government-agency and Small Business Administration bonds by January.

The company shifted $189 billion of agency mortgage-backed securities to held-to-maturity on its balance sheet, shielding its shareholder equity from unrealized losses.

Excess returns on the bonds, which compares mortgage backed security performance to Treasuries, are -0.94% for March, on track for the worst relative performance since September.