Mortgage Dwindle in Supply as New Breeds Take Root

  • Written by Joy Wiltermuth of MarketWatch

Old mortgage bonds at the heart of the 2008 global financial market crisis are on the road to becoming extinct.

Like baby boomers eclipsed by millennials, older housing bonds soon will be outnumbered by newer ones that came of age during the past decade.

Mortgage bonds packed with crisis-era home loans have dwindled to just $431.5bn from their 2007 peak of more than $2.3 trillion as home foreclosures, borrower defaults and loan repayments have trickled through the system, according to Bank of America Merrill Lynch data.

“Half way through 2019, it appears non-agency RMBS may be at a turning point in terms of issuance,” Bank of America analysts led by Chris Flanagan wrote in a note to clients.

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