A paltry $7.7 billion in mortgages were securitized by private conduits in the first quarter of 2008, according to new numbers compiled by Inside Mortgage Finance. And just eight firms were active in the private mortgage conduit market in the first three months of the year. This compares with 40 firms that produced more than $242 billion in private conduit mortgage activity a year earlier.
The private conduit market – firms that buy/originate and securitize non-conforming mortgages – has effectively vanished in the current credit-starved economic environment. What little activity there has been in the private mortgage conduit market has mostly involved jumbo loans. The purchase and securitization of subprime and Alt A mortgages has dried up almost completely.
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