Search

Fed MBS Purchases on Hold at $16 Billion

by devteam December 11th, 2009 | Share

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS).

In the five trading days between December 3 and December 9, the Federal Reserve purchased a total of $27.25 billion agency MBS. In those five days the Federal Reserve sold $11.25 billion agency MBS, most of which were Fannie 5.0 coupons (dollar rolls). The Fed's weekly net purchase total was $16.00 billion. This is the fourth consecutive week purchases have come in at $16.00 billion.

The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.

Since the inception of the program in January 2009, the Fed has spent $1.07 trillion in the agency MBS market, or 85.65 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.

Of the net $16.00 billion purchases made in the week ending December 9:

  • $400  million was used to buy 30 year 4.0 MBS coupons. 2.50 percent of total weekly purchases
  • $8.35 billion was used to buy 30 year 4.5 MBS coupons.  52.19 percent of total weekly purchases
  • $2.55 billion was used to buy 30 year 5.0 MBS coupons.  15.94 percent of total weekly purchases
  • $3.10 billion was used to buy 30 year 5.5 MBS coupons.  19.38 percent of total weekly purchases
  • $1.00 billion was used to buy  30 year 6.0 MBS coupons. 6.25 percent of total weekly purchases
  • $600  million was used to buy 15 year 4.0 MBS coupons. 3.75  percent of total weekly purchases

60.3 percent of the mortgage-backs purchased were Fannie Mae MBS, 30.3 percent were Freddie Mac coupons, and 9.3 percent were Ginnie Mae coupons.

The Fed's daily purchase average was $3.2 billion per day, in-line with recent daily purchase averages.

Below is a chart illustrating the evolution of the Federal Reserve's Agency MBS Purchase Program.

Notice the majority of Fed purchases were in 4.5 MBS coupons last week…over 50%. These are called “production” or “current” coupons and represent loan supply being sold in the secondary mortgage market by loan originators.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.

About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

See all blogs
Share

Comments

Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...