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  • Comment Detail

  • Date: 05/08/24
    First Name: Serkan
    Last Name: Eren
    Organization: N/A
    City: N/A
    State: N/A
    Attachment: N/A
    Number: 2024-N-5

  • Comment

    As part of an institutional investor in Agency MBS market, I am against this program. Although, enabling consumers to tap existing home-equity in an easier manner seems like a well-meaning intent, the macro-economic consequences of what effectively can be a massive fiscal stimulus comes at a wrong time where inflation has been a recent concern Fed has been fighting with. Furthermore, this could create significant turbulence in the current TBA/MBS markets for first lien mortgages, as the additional ambiguity on prepayment risk of first lien mortgages would be so much harder to manage & price for investors. In other words, one can expect the current TBA/MBS market spreads to widen & execution to get worse, as investors expect to be compensated for this additional ambiguity.