In the old days every major Wall Street house and mega-lender had a whole loan trading desk. Some survived and some folded. Some continue to concentrate on CRA eligible loans, while others are actively trading nonperforming mortgages. We understand that certain shall we say 'up and coming' players in the business are looking at opening trading desks for this one sole reason: regional and community banks need assets and what better asset to hold these days than tightly underwritten mortgages, preferably ARMs, and loans with shorter durations such as jumbos. As one mortgage veteran told us: “Banks have too many excess deposits.”
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