Jan. 12 at 10:08 PM
Bill Ackman floated a very “hedge fund fixes housing” idea: add prepayment penalties to new mortgages so MBS investors don’t have to price the borrower’s free prepay option — he claims that could cut mortgage rates by ~65 bps. With 30Y fixed still around the low-6% area, you can see why the idea’s getting airtime — even if it’s politically radioactive.
Tickers:
$MBB $ITB $TLT
Our view is this is directionally right on the math, wrong on the politics: prepay is basically a cultural “right” in US mortgages, so a real penalty regime is hard to push through. If this headline knocks housing-sensitive names on sentiment, we’d treat it as dip-buyable volatility, not a durable policy shock - the real driver is still rates + supply, not clever contract tweaks.
