Capital markets

The government-sponsored enterprise on Tuesday priced its fifth Connecticut Avenue Securities transaction this year, making further progress in supporting the market it left during the Trump era.

However, originators selling loans to Fannie Mae and Freddie Mac will have almost 10 months before the Supplemental Consumer Information is required.

Fair value increases on existing business and an accounting change made for troubled debt restructurings likely explain why its results contrasted those of competitor Freddie Mac.

While the government-sponsored enterprise’s single-family mortgages are still not performing as well as they did before the pandemic, the most recent vintages are getting there.

Improved loan performance, a credit reserve release, higher g-fees and reduced portfolio runoff helped to offset declining single-family loan purchases.

Some Fannie Mae and Freddie Mac packages are attracting offers in the mid-5 times range, MIAC Analytics said.

Mortgage companies, particularly small ones, might have trouble meeting a higher bar set to cover one of the risks that emerged during the pandemic, commenters said during a public listening session.

Anticipation of the Federal Reserve’s balance-sheet reduction is weighing on bonds backed by mortgages, but the actual event may make them an attractive alternative to corporate debt.

The government-sponsored enterprise has already done twice as many of these deals as it did during all of 2021.