Will the Federal Reserve really stop buying Fannie Mae and Freddie Mac MBS come March 31? That's the big question hanging over the mortgage market right now. If the Fed stops buying will the GSEs themselves step up and buy their own MBS? If they do, one can hope that Fannie and Freddie have some darn savvy mortgage traders running their desks. Both could stand to make -- or lose -- a lot of money in the months ahead. If the Fed does, indeed, go 'Cold Turkey,' mortgage rates will rise, which will increase the value of mortgage servicing rights. And which companies own the most servicing? The answer is obvious: Bank of America, and Wells Fargo & Co. with 45% of the market. As Mel Brooks once said, âItâs good to be kingâ...
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