As borrowers in prime non-agency MBS transition out of forbearance plans, investors in the deals could experience reduced cashflows due to interest shortfalls.
Various announcements by Ginnie, FHFA and the GSEs helped investors in MSRs get more comfortable in recent months. Meanwhile, use of Ginnie’s PTAP financing option remains minimal.
The enterprise said 544 loans from uniform MBS pools and 677 loans from mega/super pools were erroneously liquidated due to a servicer’s error. Investors in the securities have the option to pursue claims.
While Fannie began accepting single-family SOFR-indexed ARMs in Au-gust, it stopped taking LIBOR-indexed mortgages at the end of September. By the end of the year, the enterprise will no longer issue LIBOR-linked MBS.
With a relatively high share of borrowers missing mortgage payments, investors in non-agency MBS are seeing reduced cash flows and, in some cases, losses. Though mortgage performance is improving, the outlook for investors remains uncertain.
The majority of Freddie Mae’s forborne multifamily loans were in small-balance loan pools. Just 251 of them loans were in the company’s signature K-deals.