First the good news: the White House later this month will release its plan to refinance billions of dollars of outstanding mortgages. (We might get a taste tonight when the president makes his speech.) Now the bad news: no one is certain exactly what it will look like and who will be eligible. As we already reported, certain Fannie Mae/Freddie Mac MBS investors are none too thrilled with the plan because the 6% MBS they currently own will wind up yielding 4%. Another big stumbling block is some of the megabanks who will see their MSR portfolios run off. But as one advisor who is close to plan told us: “We need to do something now – and you can't please everyone”…
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