REFILE-Wells Fargo snags Merrill's Jackson for MBS-source

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By Al Yoon

NEW YORK, March 11 (Reuters) - Wells Fargo Securities, the broker-dealer arm of the largest U.S. mortgage lender hired veteran strategist Kevin Jackson for its mortgage bond trading unit, a source familiar with the situation said on Thursday.

Jackson, a former manager for portfolios of mortgage funding giants Fannie Mae and Freddie Mac, was part of Merrill Lynch Bank of America's Rate Lab strategy unit.

The source said he will leave Merrill Lynch Bank of America in New York on Thursday and join Wells Fargo (WFC.N) in Charlotte. Jackson circulated an e-mail on Thursday only saying he was leaving Merrill Lynch Bank of America.

He is known as a contrarian, or making recommendations going against conventional wisdom.

Last year, he correctly advised clients in the $5 trillion market for Fannie Mae and Freddie Mac mortgage bonds to invest in the segment of those mortgage-backed securities that were paying higher rates of interest.

Many analysts advised clients to shun those mortgage securities, warning they were priced too high given risks that principal prepayments would rise.

The government-supported mortgage bond market is the primary source of funding for the U.S. residential housing market, with private sources of capital still largely frozen. It has grown more perilous since 2008 as rising delinquencies cause issuers to increasingly strip loans from the securities, leading to potential losses to investors.

Jackson, 42, will trade with investors that are willing to pay up for specific characteristics in mortgage bonds. (Editing by W Simon)