Banks dumped $26 billion in mortgage-backed securities holdings in the last week, a significant drop over a short period, according to analysts at JPMorgan during a client call on Tuesday.
“It’s a decent drop,” said Matthew Jozoff, head of mortgage-backed securities research at JPM. “Last time it was at these levels was in December. We’ll have to see if this number corrects next week or not,” Jozoff told SI.
Jozoff pointed to “government intervention and government proposals” taking center stage in the mortgage sector recently, citing the g-fee hike to agency mortgage borrowers, changes to the Home Affordable mortgage and refinancing programs as well as President Barack Obama’s State of the Union speech in which he proposed a....