Underway at the JPMorgan conference is the bank's presentation on MBS, and it's a bullish one...

|By:, SA News Editor

Underway at the JPMorgan conference is the bank's presentation on MBS, and it's a bullish one (webcast). On one hand, there's the Fed buying the paper and driving rates down (and price up). On the other is the FHFA raising its guarantee fees, essentially crowding out the GSEs and forcing banks to retain loans. The effect of this is to reduce "callability" or prepayments. Both actions will lead to mortgage outperformance.