The warehouse sector is in a historic sweet spot: Nonbanks are making money hand-over-first, while accepting the tighter underwriting requirements placed on them. (Includes data charts.)
With combined assets worth about $6.1 trillion, Fannie Mae and Freddie Mac will need to set aside roughly $250 billion in leveraged capital in order to comply with the new rule.
In the COVID-19 era, lenders have been hampered by credit tightening and forbearance edicts, but an odd thing has occurred: Profit margins on new loans are phenomenal.
Delinquencies on mortgages in agency MBS surged in April amid financial difficulties prompted by the coronavirus. Loans were performing well before the pandemic. (Includes data chart.)
FHA is sympathetic to the plight of its lenders during the coronavirus crisis but how far will it go on forbearance for loans in progress? No one knows, at least not yet.
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