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MOODY'S REPORTS DECLINE IN PRIVATE-LABEL MBS VOLUME.

ACCORDING TO NEW YORK--BASED MOODY'S Investors Service's January 2000 Special report, 1999 Year in Review and 2000 Outlook--Private Label Mortgage-Backed Securities, the volume of private-label mortgage-backed securities (MBS) issuance declined dramatically in 1999, to approximately $83 billion. This is roughly a 25.9 percent decline from the record of $112 billion of issuance set in 1998. The report attributes the end of the refinancing boom, that had swelled the 1998 issuance totals, to a significant increase in interest rates during 1999. Ten-year Treasury bond yields increased from 4.65 percent on December 31, 1998, to 6.45 percent at the end of 1999, and mortgage rates for 30-year fixed-rate jumbo loans quoted by some originators reached 8.5 percent by the end of 1999. The interest rate increases, together with the fact that many potential refinancing customers had already locked into lower rates during 1998, led to a dramatic drop in the volume of jumbo loan refinancings during 1999, according to Moody' s. However, the rate increases were not so severe as to curtail home-purchase activity, leaving the volume of purchase-money mortgage loans largely unscathed. Alternative-A volume was again significant in 1999, according to the report. Alternative-A private-label issuance volume was approximately $15 billion during 1999, out of the $83 billion total.
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Title Annotation:Private Label Mortgage-Backed Securities
Publication:Mortgage Banking
Article Type:Brief Article
Geographic Code:1USA
Date:Mar 1, 2000
Words:212
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