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Mortgage-backed securities

Silicon Valley Bank Collapse

What is "duration risk"? (And how did it get Silicon Valley Bank into trouble?)

by Lily Jamali
Mar 16, 2023
Investing in long-term government bonds and mortgage-backed securities hurt the bank as interest rates rose and bond prices plummeted.
Some bonds are more sensitive to interest rates than others, depending on how long they take to mature. That “duration risk” hurt SVB financially.
Noah Berger/AFP via Getty Images
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Here's why mortgage rates have been falling

by Matt Levin
Dec 7, 2022
While the Fed has continued to hike interest rates, the average interest rate on a 30-year fixed rate mortgage has dropped from 7.16% to 6.4%.
When there’s a big surge in investor demand for mortgage bonds, "the price goes up, the rate goes down, and that trickles through to what the homeowners will see," said Jeana Curro at Bank of America.
Joe Raedle/Getty Images
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Why the Federal Reserve owns mortgage-backed securities — and what it hopes to achieve by offloading them

by Justin Ho
Jun 2, 2022
It all dates back to the financial crisis of 2008-09.
Stefani Reynolds/AFP via Getty Images
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Divided Decade

How a piece of software helped fuel the 2008 financial crash

by Molly Wood
Sep 17, 2018
The seeds of the Great Recession included a lot of greed, fraud ... and some technology.
Michael Osinski developed software that turned mortgages into securities for Wall Street banks. He retired years before the 2008 crash and now farms oysters on Long Island.
Tavner Murphy/Marketplace
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Fannie and Freddie to launch joint securities venture

by Nancy Marshall-Genzer
Mar 5, 2013
The regulator overseeing Fannie Mae and Freddie Mac has announced an idea to reform the mortgage giants. It involves starting a joint venture to bundle mortgages into securities that people can invest in.
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JPMorgan sued over mortgage-backed securities

by Eve Troeh
Oct 2, 2012
The New York Attorney General is suing JP Morgan Chase over mortgage-backed securities peddled by its Bear Stearns unit, leading up to the financial crisis.
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JPMorgan civil suit could be a game changer

by Eve Troeh
Oct 2, 2012
JPMorgan Chase is facing a new law suit: civil fraud charges in New York state, over mortgage-backed securities. How does this case differ from potential criminal charges?
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Final Note

Treasury turns $25 billion profit from mortgage securities

by Kai Ryssdal
Mar 19, 2012
The U.S. Treasury has profited from buying mortgage-backed securities during the financial crisis.
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