TMN Interview: So Do We Have To Pay Our Mortgages Now?

A $2 trillion COVID-19 relief bill is set to be passed by the House on Friday and sent to President Trump for his expected signature. There are significant sections of the bill pertaining to mortgage and housing, including protections for homeowners who experience economic hardship during the pandemic. The Mortgage Note asked Joshua Rosner, an analyst with Graham Fisher & Co., what the relief bill means for homeowners and lenders. TMN: What does the relief bill mean for borrowers? Rosner: The bill means different things to different borrowers. Borrowers whose mortgages are government backed – by the FHA, Federal Home Loan Banks, Fannie Mae and Freddie Mac – can receive up to 180 days of forbearance which, if the crisis continues after…

Ginnie Mae Loans Left Out Of Relief Bill; Regulatory Fix Possible

As feared by advocates for independent mortgage lenders, the massive $2 trillion COVID-19 relief bill leaves non-bank lenders on the outside looking in when it comes to government providing cash to back loans that lower- to middle-class borrowers may have trouble paying. The bill approved by the Senate does not specifically include non-bank lending institutions. Instead, it specifies relief is for traditional banks – “insured, depository institutions, bank holding company, or any affiliate thereof.” That would exclude non-bank institutions, whose loans are largely backed by the Veterans Administration and Ginnie Mae and traditionally serve low- to middle-income Americans. The Mortgage Bankers Association applauded Senate passage of the legislation but called for the creation of a lending facility to support non-bank…

Will Lower and Middle Class Borrowers Get Shut Out Of Relief Bill?

Will lower- and middle-class borrowers – and the lenders that serve them – get left out of the relief package being considered by Congress? Advocates for independent mortgage services said Monday that current legislation before the Senate puts borrowers from non-bank lenders at greater risk than customers from traditional banks because the bill does not specifically include the non-bank institutions. The language in the legislation before Congress refers to “insured, depository institutions, bank holding company, or any affiliate thereof.” That would exclude non-bank institutions, whose loans are largely backed by the Veterans Administration and Ginnie Mae and traditionally serve low- to middle-income Americans. “If Congress fails to address these shortcomings in proposed legislation and fails to direct the (Financial Stability Oversight…

Fed Increases Spending On Mortgage-Backed Securities

In its latest attempt to help the economy weather the coronavirus storm, the Federal Reserve on Monday announced it would spend more on mortgage-backed securities in the coming weeks. The Fed’s Federal Open Market Committee will purchase Treasury securities and mortgage-backed securities “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. The FOMC also will include purchases of agency commercial mortgage-backed securities in its agency mortgage-backed security purchases. “The Federal Reserve’s role is guided by its mandate from Congress to promote maximum employment and…

This Date In History: Obama Introduces $1 Trillion Banking Plan

The more things change, the more they stay the same. Ten years ago today, the Obama Administration unveiled its $1 trillion plan to shore up the banking industry amid the financial crisis. Here is how ABC News reported it at the time: President Obama said today that his economic team is “very confident” that the administration’s newest effort to stabilize banks – a mix of public and private funds that could total $1 trillion – will help to free up credit. The president spoke shortly after Treasury Secretary Timothy Geithner officially announced the long-anticipated program. The plan aims to remove so-called toxic assets – many of them bad mortgage investments – from the banks’ balance sheets through a private-public partnership. The program will rely heavily…

Mortgage Industry Seeks Emergency Steps To Protect Lenders

The mortgage industry on Sunday urged the Treasury Department and Federal Reserve to take additional emergency steps to ensure money is available to lenders at a time when borrowers may be slow to make their mortgage payments amid the COVID-19 pandemic. The Mortgage Bankers Association called for an increase in the scope of mortgage-backed securities (MBS) and the development of a facility to support mortgage lenders in anticipation of widespread delays in payments from property owners. “We believe these actions should be taken as urgently and swiftly as possible to counter volatility in the market, protect consumers, and ensure all market participants that the liquidity strains being caused by COVID-19 do not escalate into solvency problems throughout financial markets,” MBA…

Feds Issue 60-Day Ban On Foreclosures

The federal government on Wednesday ordered a 60-day moratorium on foreclosures and evictions for single-family homeowners with Federal Housing Administration, Fannie Mae and Freddie Mac-backed mortgages amid the coronavirus pandemic. U.S. Department of Housing and Urban Development Secretary Ben Carson announced the moratorium for FHA loans, which directs mortgage companies to: Halt all new foreclosure actions and suspend all foreclosure actions currently in process; andCease all evictions of persons from FHA-insured single-family properties. The Federal Housing Finance Agency also directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days due to the coronavirus. FHFA also announced earlier this month that Fannie and Freddie would provide “payment forbearance” to borrowers impacted by the coronavirus. Forbearance…

Fed Announces Two Facilities To Support Credit Markets Amid Pandemic

The Federal Reserve Board announced Tuesday that it will establish two “facilities” to support the flow of credit to people and businesses during the turmoil caused by the coronavirus pandemic. The Fed is establishing a Commercial Paper Funding Facility (CPFF) and a Primary Dealer Credit Facility (PDCF), both designed to ensure credit is available to Americans. The Treasury will provide $10 billion of credit protection to the Federal Reserve in connection with the CPFF from the Treasury’s Exchange Stabilization Fund.  “By providing short-term credit, the CPFF will help American businesses manage their finances through this challenging period,” U.S. Treasury Secretary Steven T. Mnuchin said. “The CPFF will provide a liquidity backstop to U.S. issuers of commercial paper through a special…

Coronavirus: FDIC Suspends Early Retirement Program

The Federal Deposit Insurance Corporation announced Monday that the early retirement and separation program offered to up to 20 percent of its workforce has been suspended as part of the agency’s response to the coronavirus. The FDIC announced the buyouts earlier this month, saying the program is an effort to rebalance the workforce by growing its examination and risk-related teams. Additionally, the FDIC plans to add specialized information technology, computer science, data management and loan-review personnel. As part of the plan, the FDIC announced several field offices will be closed and consolidated with other offices. In announcing the suspension of the buyout program, the FDIC also announced: The Board of Directors meeting Tuesday will be held on a “notational basis.” Vote results and…

Feds Encourage Lending Institutions To Use Discount Window

Federal banking agencies on Monday urged lending institutions to use the Federal Reserve Discount Window, which helps commercial banks manage short-term liquidity needs. In a statement, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency encouraged “depository institutions to use the discount window to meet demands for credit from households and businesses at this time.” The agencies said, “By providing ready access to a backup source of funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers, such as withdrawing credit during times of market stress. Thus, the discount window supports the smooth flow of credit to households and businesses.”…