Last week, the New York Federal Reserve announced that it will accept Ginnie Mae, Fannie Mae and Freddie Mac mortgage-backed securities as collateral in repurchase transactions, making dealers more willing to hold mortgage inventories over year-end.

The news engendered a positive reaction on Wall Street, since dealers no longer have to worry about how they are going to fund pass-throughs over year-end, especially with Y2K pressures hovering over them.

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