pmuolo@imfpubs.com

Top officials from Ginnie Mae and FHA were working overtime this week, trying to reassure the mortgage market that nonbank MBS servicers will have the liquidity they need to make future bond payments as the COVID-19 pandemic lays fallow the U.S. economy and the unemployment rate soars.

As might be expected, there are doubters.

The worry wheel works like this: FHA/VA mortgagors lose their jobs, federally mandated forbearance kicks in, but MBS servicers must still pay investors who hold Ginnie Mae securities.

Just how serious is the issue? According to figures compiled by Inside FHA/VA Lending, seven of the 10 largest Ginnie Mae servicers are nonbanks. At yearend, these seven had a combined $894.2 billion in MSRs backed by mostly FHA/VA loans, products known for their low downpayments and credit scores.

For the full analysis, see the new edition of Inside FHA/VA Lending, available online later today.