Financial Firms Bypass Fannie Mae and Freddie Mac, Increase Private-label MBS: Report
By Jessica Guerin
Private investors are buying non-conforming mortgage loans – which are usually the domain of Fannie Mae and Freddie Mac – at a growing rate.
“In the last year or so, investors have proven increasingly willing to forgo the government backstop and buy private mortgage bonds, indicating they have grown more comfortable taking risk for more potential return,” the article stated. “The fact that more investors want to buy these securities means banks and other firms can package these deals more profitably, which in some cases lets them offer better bids than the agencies.”