HMBS: An Update From Wall Street 

HECM spreads have stayed remarkably resilient over the last several months. Mortgages have widened significantly (15 to 20 LOAS) in recent weeks, driven largely by extension and convexity reasons. New issue fixed-rate Standard HMBS spreads are currently trading at 56 to interpolated swaps, while new issue LIBOR Standard HMBS trades at 40 discount margin (DM).Par floater DMs have widened 10 to 15, but collateral has held firm. Notably, fixed Saver spreads have tightened considerably from roughly 150 to swaps to 120. LIBOR Saver spreads have tightened a tad to inside of 100 DM. While I don’t expect much tightening for