Original source: https://www.wsj.com/articles/private-investors-encroach-on-fannie-and-freddies-domain-11552132801
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Wall Street Journal (05/09/19) Eisen, Ben
More mortgages that meet the standards for Fannie and Freddie to buy are rather flowing into the private economy, in which banks and other financial institutions pool them into bonds and sell them to investors without government financing, a indication of the changing dynamics in the $11 trillion mortgage industry. A number of those securities have a significant amount of Fannie- and loans inside them. In the past year or so, investors have shown increasingly keen buy mortgage bonds, suggesting they have grown comfortable shooting risk for prospective yield and to forgo the standard government backstop. The simple fact that investors want to buy these securities means businesses and banks can package these prices profitably…. Read More
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