Interest Rates Unchanged; Fed Vows To Buy More MBS

The Federal Reserve on Wednesday kept interest rates effectively at 0 percent and vowed to increase holdings in Treasury securities and mortgage-backed securities to support the economy during the coronavirus pandemic. In a statement following its meeting, the Fed said it “is committed to using its full range of tools to support the U.S. economy in this challenging time.” That includes keeping interest rates in the 0 to 0.25 percent range. “To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to…

FHFA Director “Encouraged” By Forbearance Trajectory

By Jim Perskie Federal Housing Finance Agency Director Mark Calabria told Congress that forbearance rates in the United States are “manageable,” noting that the number of homeowners pausing mortgage payments has slowed considerably in recent weeks. In testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on Tuesday, Calabria said that the number of mortgages in forbearance were significantly lower than some had predicted. “Early in the crisis, there were a wide variety of predictions about the future effects of COVID-19 on housing markets,” Calabria testified. “Some observers contended that forbearance rates would reach as high as 25 to 50 percent. Given the unprecedented nature of the pandemic and the high degree of uncertainty about the economic…

Calabria: Congress Must Strengthen FHFA

By Jim Perskie Federal Housing Finance Agency Director Mark Calabria told Congress on Tuesday that he will submit legislative recommendations net week to strengthen the agency’s regulatory and supervisory authority “to fix structural flaws in our housing finance system.” Testifying before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Calabria also stressed FHFA had done significant work to support borrowers, renters and the housing market as a whole during the COVID-19 pandemic – but challenges lie ahead. “FHFA recognizes that more work remains,” Calabria said. “The crisis caused by COVID-19 is not over. The full economic and financial impact of the pandemic is not yet known. The future state of the labor market remains uncertain. The mortgage market is still…

Ginnie Mae Issues $63.44 Billion In MBS In May

Ginnie Mae announced today that its total outstanding principal balance in May was $2.15 trillion – up from $2.07 trillion a year earlier. Ginnie Mae also said it issued $63.44 billion in mortgage-backed securities in May, providing financing for more than 235,000 homeowners and renters. “Ginnie Mae MBS issuance in May of more than $63 billion financed housing for more than 235,000 families,” Ginnie Mae Principal Executive Vice President Seth Appleton said. “The national economy relies on a strong housing finance system and we at Ginnie Mae are unwavering in our mission to ensure that money flows safely and consistently to communities across the United States while minimizing risks to taxpayers.” Ginnie Mae is a wholly owned government corporation that…

FDIC Balks As OCC Announces Redlining Rule Update

The Federal Deposit Insurance Corporation said Wednesday it will not move forward with revisions to the nation’s anti-redlining law announced moments earlier by the Comptroller of the Currency. Comptroller of the Currency Joseph M. Otting announced the finalization of a rule to “strengthen and modernize Community Reinvestment Act (CRA) regulations,” saying the rule would make “CRA work better for everyone.” But the FDIC – which has joint rulemaking authority with the OCC over the law – responded from Chairman Jelena McWilliams moments later, telling banks its focus is on the coronavirus response and not changes to the CRA.  “While the FDIC strongly supports the efforts to make the CRA rules clearer, more transparent, and less subjective, the agency is not…

GSEs Seek Advisors To Leave Conservatorship

Fannie Mae and Freddie Mac are looking for financial advisors to help them emerge from conservatorship. Each of the GSEs announced they will be issuing a request for proposal on Tuesday to “secure a financial advisor that will facility the company’s responsible exit for conservatorship. The advisors will help Fannie and Freddie on everything from capital considerations to business plans to capital raising activities and more. “Even as we work to stabilize the housing markets during this unprecedented pandemic, Freddie Mac has remained focused on exiting conservatorship responsibly,” David Brickman, Freddie Mac CEO David Brickman said. “Today we begin the competitive selection process for a financial advisor that will ultimately facilitate our return to full private capital ownership. This is…

GSE Borrowers In Forbearance Can Buy, Refi – Eventually

By Jim Perskie Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three straight payments under their repayment plan, according to new temporary guidance issued Tuesday by Fannie Mae and Freddie Mac. The guidance, announced by the Federal Housing Finance Agency, clarifies how lenders should handle loans for borrowers who are in forbearance but are looking to refinance or buy a new home with federally backed mortgages. “Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said Director Mark Calabria. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.” The $2…

FHFA Extends Eviction, Foreclosure Ban

Renters and borrowers who face being kicked out of their homes received at least a six-week reprieve on Thursday. The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac are extending their moratorium on foreclosures and evictions until at least June 30 as homeowners and renters struggle with the coronavirus pandemic. The foreclosure moratorium was set to expire on Sunday. It only applies to single-family mortgages backed by Fannie and Freddie. “During this national health emergency, no one should be forced from their home,” FHFA Director Mark Calabria said. “Extending the foreclosure and eviction moratoriums protects homeowners and renters with an Enterprise-backed mortgage and provides certainty for families.” FHFA said it will “continue to monitor the coronavirus situation…

FHFA Announces Deferral Option On GSE Mortgages

The Federal Housing Finance Agency announced Wednesday that homeowners in forbearance can now opt to repay missed payments on Freddie Mac and Fannie Mae loans at the time their home is sold, when it is refinanced or at the end of the mortgage. “For homeowners in forbearance due to COVID-19, payment deferral allows them to make up missed forbearance payments when they sell their home or refinance,” said FHFA Director Mark Calabria. “This new forbearance repayment solution responsibly simplifies options for homeowners while providing an additional tool for mortgage servicers.”  Calabria added, “Borrowers who can pay their mortgage should, because missed payments remain an obligation that will ultimately have to be repaid.” Eric Kaplan, the Director of the Milken Institute…

Feds Launch COVID19 Housing Assistance Website

The U.S. federal government launched a new website Tuesday designed to provide information and resources to homeowners and renters impacted by the coronavirus pandemic. The site – cfpb.gov/housing – includes resources from the Consumer Financial Protection Bureau, the Federal Housing Finance Agency and the Department of Housing and Urban Development. It includes information about what mortgage relief options homeowners may have, explains how to access mortgage relief or forbearance, details on protection for renters, and tips on avoiding scams during the pandemic. “During these uncertain times, consumers need reliable, fair, and accurate information on the protections and relief options available to them. This joint website achieves this important goal for homeowners and renters, outlining clearly the changes that policymakers are…