JP Morgan Chase is trying to sell new securities on $1.9B in mortgages as a way to revive the debt market, which has been dominated by Fannie Mae and Freddie Mac since the 2008 crisis.
The banking giant plans to sell only the riskiest 10% of the deal to investors, holding on to the safer parts itself.
Before the crisis banks issued trillions worth of MBS, but they've had trouble peaking interest since then, issuing only $61.6B in mortgage bonds in 2015—compared with the $1.19 trillion peak in 2005, the Wall Street Journal reports.
JP Morgan’s choice to market the bonds to private investors, rather than Fannie and Freddie, says the bank thinks it can get a better deal than the government-sponsored enterprises, and marks an important step in bringing private capital back into the home loan market. [WSJ]
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