Overseas investors continue to be a reliable source of demand for agency mortgage backed securities. 

Foreign interest in agency MBS is expected to remain strong, given the low-to-no default risk characteristics of Fannie Mae, Freddie Mac and Ginnie Mae securities, according to a recent Ginnie report on foreign ownership of agency MBS. The greatest potential for increased investment? That would come from nations with surpluses of disposable wealth and fewer or looser regulatory limitations on investment in mortgage-related MBS. Guarantors looking to court investors must efficiently communicate their value proposition “to those most likely to appreciate their product offerings,” the report said, adding “it is vital to establish institutional knowledge regarding the specific economic circumstances and foreign investment posture of potential sources of foreign investment.” This fall, Ginnie President Alanna McCargo restarted visits to foreign investors, traveling overseas with several members of her leadership team to Japan.

Source: Inside Mortgage Finance