Securitization

Sales of bonds earmarked for supplemental coverage of large windstorms, earthquakes and other events totaled $17.7 billion, up 7% from the previous record set a year ago.

The residential market is expected to face challenges from stubbornly high mortgage rates and limited supply in 2025, particularly after Fed Chair Jerome Powell's comments on Wednesday indicating fewer rate cuts are coming.

A Congressional Budget Office report updating one from four years ago finds 60% of its 250 scenarios will result in the Treasury getting fully repaid, up from 12%.

The deal mitigates mortgage-pool risk with CLO credit strengths

Unlike some recent RMBS deals, both exclude riskier interest-only loans and those supporting investment properties.

Top banks are underwriting the deal, but most of the securitization's loans lack documentation.

The proposal is one of several that aims to address difficulties managing early buyouts from mortgage-backed securities pools.

Underwriting methods have been steadily shifting to traditional full documentation, which accounts for 13.3% in the VERUS 2024-9, KBRA said, its largest share since VERUS 2024-6.

The economist, who runs Roubini Macro Associates, is positioning for a curve steepener, a popular Treasuries trade where the gap between long- and short-dated yields widens.

Freddie Mac is offering a municipal bond option for investors in its ML multifamily securitization offerings starting with its December issuance.