Democratic Reps Seek To Cancel Mortgage, Rent

Rep. Ilhan Omar has proposed legislation in Congress that would cancel rent and mortgage payments for the entirety of the coronavirus pandemic, under the threat of seizing property from landlords who run afoul of the proposed law. The Rent and Mortgage Cancellation Act of 2020 would suspend all rent and mortgage payments on primary residences, regardless of the tenant’s or mortgage holder’s ability to pay or whether they had suffered any financial hardship. “We need to cancel rent and mortgages for the duration of the crisis,” Omar said in a Tweet. “We need to provide universal monthly payments to all Americans. And we need to make sure our states and cities don’t go bankrupt. We need to pass a fourth relief package…

GSEs To Purchase Some Loans In Forbearance

The Federal Housing Finance Agency announced Wednesday that it will allow Fannie and Freddie to purchase some single-family mortgages in forbearance in an attempt to support the liquidity of mortgage lenders during the coronavirus pandemic. FHFA took action in response to borrowers seeking mortgage forbearance shortly after closing on loans – and before the lender could deliver the loan to Fannie Mae or Freddie Mac (GSEs). Prior to Wednesday’s change, loans in forbearance were ineligible to be sold under Fannie and Freddie requirements, placing the borrower and the lender in jeopardy. “We are focused on keeping the mortgage market working for current and future homeowners during these challenging times,” FHFA Director Mark Calabria said. “Purchases of these previously ineligible loans…

FHFA: Lenders To Cover Just 4 Months Of Missed Payments

The Federal Housing Finance Agency announced Tuesday that mortgage lenders will only have to cover four months of missed payments from borrowers under forbearance during the coronavirus pandemic. The change applies to all mortgage lenders managing Freddie Mac or Fannie Mae backed loans. FHFA, which had been under intense pressure to provide relief to lenders, said that mortgage servicers with Fannie and Freddie loans will have “no further obligation to advance scheduled payments” to creditors after four loan payments have been missed. In short, the announcement means the loans in forbearance due to the coronavirus can be kept in mortgage-backed security pools as long as they are in forbearance. “The four-month servicer advance obligation limit for loans in forbearance provides…

The Calabria Files: Very, Very Wrong

Federal Housing Finance Agency Director Mark Calabria said on April 1 he expected 300,000 Fannie Mae and Freddie Mac loans – or 1 percent of their mortgages – to go into forbearance in April. Less than three weeks later, he’s way, way off. The Mortgage Bankers Association reported that 4.64 percent of Fannie and Freddie loans were in forbearance as of April 12. And an analysis by financial technology firm Black Knight found that there were nearly 1.4 million Fannie and Freddie loans in forbearance as of Friday, April 19 – representing 4.9 percent of their mortgages. Calabria made his original prediction of 300,000 on CNBC on April 1, prefacing them by saying they were very preliminary and may change: …

FHFA, CFPB Share Data To Protect Borrowers

The Federal Housing Finance Agency and the Consumer Financial Protection Bureau announced a new initiative Wednesday that allows them to share information to ensure borrowers are getting information about mortgage relief during the coronavirus pandemic. The CFPB will make complaint information and analytical tools available to FHFA, which will in turn make data available to the CFPB information about forbearances, modifications and other loss mitigation initiatives undertaken by Fannie Mae and Freddie Mac. “Protecting and helping homeowners during this national crisis is my top priority. No one should be worried about losing their home,” FHFA Director Mark Calabria said. “Borrowers are entitled to accurate information about their forbearance options. This partnership with CFPB ensures FHFA can address misconceptions stemming from…

Mnuchin: “Very Aware” Of Challenges Facing Non-Bank Lenders

Treasury Secretary Steven T. Mnuchin said regulators are “very aware of the issue” around non-bank lenders facing liquidity challenges brought on by borrowers not making mortgage payments during the coronavirus pandemic. “We’re very aware of the issue,” Mnuchin said at a White House briefing Monday. “Quite frankly, we’ve been studying this issue way before COVID and had concerns about some of these non-bank servicers not being well-capitalized, but we’re going to make sure that the market functions properly.” Mnuchin also said, “We had a subcommittee task force … that specifically studied this issue. We have all the appropriate people on it. Ginnie Mae has automatically taken some action. We’ve had conversations with the FHFA as to what they’re going to do…

Ginnie Mae Creates Lender Assistance Program

Ginnie Mae announced late Friday that it is implementing an assistance program for lenders whose customers aren’t able to make mortgage payments due to economic hardships caused by the coronavirus pandemic. The Pass-Through Assistance Program (PTAP) is designed to support mortgage lenders facing a temporary liquidity shortfall directly due to the national emergency. The program will allow mortgage issuers to seek assistance in “meeting their contractual obligation to make timely and in full principal and interest payments due mortgage-backed security holders without being held in default under the Ginnie Mae Guaranty Agreement.” Funds advanced to lenders by Ginnie Mae will bear a fixed rate of interest. “This is an extraordinary and last resort option for Issuers in these unprecedented times,…

Clock’s Ticking: Where Is Ginnie Mae? (Update)

On Friday, March 27, Ginnie Mae announced that it would – within two weeks – implement an assistance program for lenders whose customers can’t make mortgage payments due to the coronavirus pandemic. The two weeks is up Friday, and a spokesman said the agency has “no definitive timetable for this program, but it is expected to be rolled out shortly. Please keep an eye on our website.” Update: Ginnie Mae Announces Support Program For Lenders Lenders will begin to face liquidity challenges starting next week – Wednesday to be precise – as they need to pay creditors for loans they carry. The problem is: Nearly 16 million people have applied for unemployment over the last three weeks, and huge numbers…

Powell: Fed Watching Mortgage Industry Carefully

Federal Reserve Chair Jerome Powell said Thursday that the Fed is closely watching the economic situation around mortgage lenders and appeared to leave the door open to providing liquidity support to the industry. In a webcast with the Brookings Institution, Powell discussed rate cuts, financial safeguards and lending programs enacted by the Fed and other regulators during the coronavirus pandemic. He specifically said the Fed is “watching carefully the situation with the mortgage servicers.” “We certainly have our eyes on that as a key market that does support households and consumer spending, really, which is of course 70 percent of the economy,” Powell said. His comments come amid a volatile political week in the mortgage lending industry as companies, advocates, regulators…

Senators: Feds Must Support Non-Bank Lenders

A bipartisan group of U.S. senators on Wednesday urged federal regulators to provide liquidity to non-bank lenders who say a mortgage crisis is looming due to a potential shortage of cash as borrowers stop making payments during the coronavirus pandemic. The seven senators sent a letter to Treasury Secretary Steven T. Mnuchin, who is chairman of the Financial Stability Oversight Council (FSOC), a day after the head of the Federal Housing Finance Agency said he sees “zero evidence” the federal government needs to intervene. “Given that we could see as much as $100 billion in mortgage payments forborne through this program, it presents an existential threat to these companies, and thus to the broader mortgage market,” the senators wrote in the 1,100-word…