FACEBOOK
TWITTER
Mortgage Bond Investors Seek ‘Obama Button’ To Divine Trades
By AL YOON
NEW YORK—Investing in the $5 trillion agency mortgage-backed securities market has long been a technician’s game, with statistics and mathematical formulas frequently guiding investor decisions.
But the last few years have seen greater uncertainty in predicting key variables—in particular how fast homeowners will repay their loans—because federal policy makers have repeatedly changed the rules of the mortgage game via the Obama administration’s ad hoc remedies to housing-market woes.
This has led dealers to retool, and investors to rethink, the mathematical models that for decades have sought to identify the most profitable bonds and warn against clunkers.
FTN Financial mortgage strategist Walter Schmidt said an investor joked to him that one way to improve models would be to add an “Obama button” that could magically factor in the effect of White House policy changes wrought through the government’s control of housing-finance giants Fannie Mae and Freddie Mac.
Short URL: http://www.vahomeloannews.com/?p=579
Posted by Liz Reed on Oct 28 2011, With 0 Reads, Filed under Refinance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
COMMENTS
To post a comment, you must login using Facebook, Yahoo, AOL, or Hotmail in the box below.Don't have a social network account? Register and Login direct with our site and post your comment.
Before you post, read our Comment Policy - Legal Notice
