30-10 or Bust
With smaller lenders today joining MBA, NAR, and HomeBuilders’ campaign to squeeze the 30-10 spread, we take a look at the odds the White House, Fed, or Treasury will do as hoped. We think it more than possible that the PSPA could be revised with FHFA consent to allow the GSEs to hold more of their own MBS as a spread stabilizer; whether the GSEs will do so unless forced is another question given the considerable capital cost this would exert.