Get the latest on mortgage rates and RMBS in a new episode of DS5: Inside the Industry. In this episode, hear from John Lynch, CEO of PCMA, and Holden Lewis, a housing and mortgage Specialist for Nerd Wallet.
Lynch, an executive member of the Non-Prime Lending Council, brings updates on how the industry is working with borrowers to ensure there are no disruptions in service during this time.
Lynch notes that “we’re waiting for the Fed to step in and support non-agency RMBS,” though he notes that it is probably low on list of Fed’s priorities. According to to the FHFA, when a mortgage is in a mortgage-backed security (MBS), Fannie Mae servicers with a scheduled payment are responsible for advancing the principal and interest payment regardless of borrower payments.
Later on, Lewis will be discussing mortgage rate trends in the months ahead. He will also discuss the Fed’s announcement to purchase MBS to stabilize the mortgage market.
The FHFA is currently instructing the GSEs to main loans in COVID-19 forbearance plans in MBS pools for at least the duration of the forbearance plan.
Mortgages that are delinquent for more than four months, historically, were purchased out of MBS pools by the GSEs. Loans with COVID-19 payment forbearance shall be treated “like a natural disaster event” and will remain in the MBS pool.