Wells Fargo and Chase together accounted for more than half of all borrowers exiting forbearance in July, Wells Fargo Securities found in its deep dive into new, loan-level data on Fannie Mae’s Connecticut Avenue Securities.
Fannie Mae’s credit-risk transfer loan-level data show 21.0% of borrowers that were in forbearance in June exited when their relief plans expired in July. That works out to 1.7% of the government-sponsored enterprise’s outstandings.
The improved financial performance of the GSEs largely reflects the impact of CECL. The provisions for losses that would have been made in 2Q20 under the old accounting standard were already accounted for by CECL, which was adopted in December. (Includes data chart.)
The Federal Housing Finance Agency said it lacks sufficient data to create statistical models to “reflect economic conditions for 2021” because of the market disruption caused by the coronavirus.
The panel this week heard testimony that servicers failed to inform borrowers of their right to forbearance, offered less assistance than required by law and provided inaccurate information on lump-sum repayments.
The CRT market is showing signs of post-pandemic recovery. But Freddie Mac’s former CEO believes the re-proposed capital rule for the GSEs could make the whole CRT program pointless.
Time is of the essence if FHFA Director Mark Calabria wants Fannie and Freddie irrevocably out of conservatorship before a possible change in administrations in November.