As the week got underway, up-in-coupon mortgage trades were beginning to feel the love again as investors began to discount the risks of a government-induced refinancing event.

Last week, there were numerous mortgage-backed research that came out following the publication of a report by Morgan Stanley economists called Slam Dunk Stimulus. The economists from the firm said that the U.S. economy could receive an immediate significant boost, without impacting the budget deficit, if "the government merely recognized its existing guarantee on the principal value of a large part of the mortgage market — the mortgages that are backed by Fannie, Freddie and Ginnie — and acted to streamline the refi process."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.