When mortgage rates blew past the 7% level earlier this year, the securitization market “froze up temporarily,” according to Doug Duncan, senior vice president and chief economist at the government-sponsored enterprise Fannie Mae. 

“Investors who would buy a mortgage-backed security [MBS], which is backed by mortgages that have a 7% coupon, believe that when the Fed eases interest rates, the people with those 7% mortgages will refi,” Duncan said on Friday during the AIME Fuse 2023, the Association of Independent Mortgage Experts’ conference held in Las Vegas. 

Duncan added: “So what details ⇒

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