Fannie Mae and Freddie Mac are set to auction as much as $17 billion of mortgage bonds they acquired before the real estate collapse to meet a regulatory directive, potentially straining demand at the same time the Federal Reserve considers a stimulus pullback.
Invesco Mortgage Capital Inc. sold $150 million of default protection on U.S. home-loan securities owned by a European bank, as toughening capital rules for financial companies offer opportunities for investors, Chief Financial Officer Donald Ramon said.
State Street Corp ., the third-largest custody bank, sold $11 billion in mortgage-backed securities and other assets, a step more financial companies may take after global regulators agreed to tighten capital rules.
Investors seeking to buy higher yielding, riskier slices of home-loan bonds sold yesterday by EverBank Financial Corp. were told they’d have a better shot if they also purchased some of the AAA rated classes, showing weaker demand for the top-ranked debt.
Mortgage rates in the U.S., after increasing at the fastest pace in a decade, are poised to rise even further with Federal Reserve Chairman Ben S. Bernanke saying the central bank is ready to slow its purchases of Treasuries and bonds backed by housing loans.