"Correct me if I'm wrong, but I think the initial post is confusing the TBA coupon rate for a loan's note rate. 15yr Ginnie 4.5s have "WACs" (Weighted average coupon rates, a bit of a misnomer) 50 basis points higher, or 5%. For a true comparison, you have to take this into account. E.g., right now Fannie 4.5s are trading in the high pars for April settlement, which means that a 5% loan (after fees and such) would be around a zero-point rate. Also, 15-year Ginnies and 20-year pools..."
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"Generally, yes, but keep in mind that there are two Ginnie Mae pooling programs. Ginnie Is (the larger of the two) always carry loans with note rates 50 basis points over the coupon rate. Ginnie II pools don't have this limitation."
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"Interesting thought...keep in mind, though, that "deliverability" (i.e., what loans can be included in a pool that's deliverable into a TBA forward transaction) is disctated by SIFMA, which represents the dealer community (which in turn listens closely to their customers). Investors are really sensitive to anything that will change the prepayment characteristics of deliverable pools. Mortgage bankers would love to change deliverability to include more products, but the street has vetoed..."
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"I'm certain the GSEs were buying virtually all of the production last year. They couldn't be included in deliverable pools at all last year, and the jumbo conforming pools (I don't remember the exact ticker, but they have one) were trading 2 pts back of Fannies. 10% rule only went into effect as of 1/1/09 for loans originated after 10/1/08. So it may just be that the system got clogged becuase of the 10% rule after the pop in applications last month. If so, suggests that the 'suck..."
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"Sorry, did not see the "conf jumbo" in your post when I jumped in. I looked at the Fannie loan-level price adjustments that were posted in December, and the add-ons for jumbo-conforming loans have stayed about the same since last year. Before the 10% rule went into effect, jumbo-conforming loans couldn't be delivered at all into pools, but the GSEs were buying them for portfolio at the same (or approximately the same) price as conforming loans, which pushed the spreads last spring down..."
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