Fed’s Ginnie MBS Purchases Decline

The Federal Reserve Bank of New York on Thursday announced another $19.87 billion in agency mortgage-backed security purchases for the week ending Feb. 18, bringing the total amount of purchases since Jan. 5 to $134.83 billion. The Fed purchased $7.92 billion from Freddie Mac (FRE), $10.95 billion from Fannie Mae (FNM) and $1 billion from Ginnie Mae, making the week ending Feb. 18 the single slowest week in Ginnie purchases, with the week ending Feb. 11 coming in at a close second of $1.4 billion. The Fed has so far purchased $65.8 billion from Freddie, $56 billion from Fannie and $13 from Ginnie. In the week ending Feb. 18, the Fed purchased $850 million in agency coupons with 15-year maturities. The rest of the weekly purchases occurred in coupons with 30-year maturities. Of the Fed’s total purchases so far, approximately 94 percent have been purchases of agency coupons with 30-year maturities. About 5 percent have been purchases of coupons with 15-year maturities, and just under 1 percent has consisted of purchases of coupons with other maturities — 20- and 40-year maturities, for example. The Federal Reserve in early February announced it had selected JP Morgan Chase & Co. (JPM) as custodian for the program, which began on Jan. 5 and will purchase up to $500 billion in MBS that are backed by government-sponsored entities, in an effort to maintain liquidity in a vital section of the U.S. mortgage market. The Fed has also said it may soon begin modifying mortgages it owns within the assets it owns. Write to Diana Golobay at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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