Multifamily Bonds Surging to Record U.S. as CMBS Fade: Mortgages via Bloomberg

Bonds backed by Fannie Mae and Freddie Mac tied to apartments soared to a record as the government-supported mortgage companies made low-cost loans on rental properties amid a continued slide in home values.

Fannie Mae, Freddie Mac and Ginnie Mae sold $13.5 billion of securities tied to the buildings in the first quarter of 2012, an 81 percent increase from the year-earlier period and up from $5.2 billion issued in all of 2008, according to data compiled by Bloomberg. It’s the highest quarterly issuance since records began in 1993.

The mortgage companies, rescued by the government after taking losses on home loans, are increasingly packaging apartment debt into securities for sale as regulators instruct them to aid housing and shrink their balance sheets. Wall Street banks are benefiting from selling the deals as Europe’s sovereign fiscal crisis has fueled volatility in credit markets and restrained transactions without the guarantees.

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