Private Mortgage Security Market Shrinks by Two-Thirds
New mortgage-backed securities issued by non-governmetn operations plunged 68.3 percent in the first quarter of 2009 from the same period a year earlier as investors fled the market leaving the housing market almost entirely with government bond issuers. Thomson Reuters said U.S. mortgage-backed securities issuance totaled $21.6 billion in the first quarter of 2009, down sharply from $68.2 billion in the same period a year earlier, a drop of 68.3 percent.
Issuance of bonds backed by companies other than Fannie Mae (FNM.P) (FNM.N), Freddie Mac (FRE.P) (FRE.N) and Ginnie Mae has virtually come to a halt as investors refuse to buy securities backed by loans whose payments are not guaranteed.
Bank of America (BAC.N) was the top underwriter of U.S. mortgage-backed securities in the first quarter of 2009, the survey showed.
Bank of America underwrote 13 issues of mortgage-backed bonds totaling $4.9 billion, a 22.7 percent market share.
Barclays Capital, the investment banking arm of UK lender Barclays (BARC.L), ranked second among U.S. MBS underwriters in that quarter, with a 17.6 percent market share. The company underwrote five issues totaling $3.8 billion.
Goldman Sachs & Co (GS.N) was third, with a 14.0 percent share. The firm underwrote five issues worth $3.0 billion.
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