#mortgage-backed-securities

#mortgage-backed-securities

He stressed that the U.S. mortgage-backed securities market relies on long-term, fixed-rate loans with highly predictable performance, something portability threatens to destabilize. Portable mortgages, in addition to other issues, would totally destroy the pricing models current used by MBS's in their investor presentations, Cantrell said. The portable mortgage is also predicated on widespread lender adoption and the lender being willing to trade one asset for another.

Part of the decline can be attributed to a continued gradual compression of the " mortgage spread" -the difference between the 10-year Treasury yield and the average 30-year fixed mortgage rate-as some investors slowly regain their appetite for mortgage-backed securities (MBS) and help fill the void left by the Federal Reserve when it stopped buying MBS in spring 2022. The other factor putting downward pressure on mortgage rates-and long-term yields-has been a recent stretch of softer-than-expected labor market data and financial market's growing expectation that the Fed will shift policy from restrictive to neutral.

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