The Mortgage Market: A Wall Street Perspective

Credit unions attending the Financial Solutions Symposium in Orlando were given the opportunity to hear a leading Wall Street analyst’s outlook for the mortgage-backed securities market – and the impact this sector will have on their business.


Matt Jozoff, vice president of mortgage market strategy for Goldman Sachs, touched on a number of factors driving the mortgage markets at the Financial Solutions Symposium. He addressed how these items will impact investment portfolio performance and balance sheet risk for credit unions.

Describing the current environment, Jozoff highlighted several new dynamics that are helping to shape existing market conditions and could be sustainable drivers in the future.

  • Due to the trade deficit, Asia is a major sponsor of mortgages and they could emerge as a rival to the agencies.
  • Net Issuance of 30-Year Fixed should be very light, with all growth going into hybrids.
  • ARMs are here to stay; looking at past production 2008 should be a big year for interest rate resets (see graph below)

Mortgage spreads to the treasury/swap curve are tight, but they have been tighter. New buyers (Asia) may not even be considering spreads, rather just evaluating based on yield.

The Financial Solutions Symposium convened in Orlando last week and attracted credit unions attendees from around the country. The event, co-hosted by Callahan & Associates and Wescorp, featured a number of speakers from the credit union system as well as presentations from public accounting firms and investment banks.

If you would like more details on the Goldman Sachs presentation or other agenda items from the conference please feel free to contact:

Jon Jeffreys – or
Mike Philbin –




March 28, 2005


  • It needed to have more information and a better graph. What was in the article was good.