In an effort to add liquidity to the market for servicing advances, Ginnie Mae is permitting a note structure, which allows for the securitization of servicing cash flows through a trust. First user: PennyMac.
The federal government is marshaling all its resources to help nonbanks with MBS obligations stay liquid. For now, the effort appears to be working but new brush fires are popping up.
The non-mortgage ABS sector stood alone as the only market to post increased production in the first quarter, but activity came to a near standstill in March. (Includes three data charts.)
On the same day that the Federal Reserve bought its first $1 billion in agency multifamily MBS, it purchased more than $41 billion in agency single-family MBS.
The coronavirus economic assistance package is signed, sealed and delivered but concerns remain over the ability of nonbanks to pay MBS holders in the event delinquencies spike over the short term.
A resumption in quantitative easing — at a pace that dwarfs asset purchases during the financial crisis — is just one of several Fed actions to keep credit markets functioning through the coronavirus crisis.
Federal forbearance on government backed mortgages is a panacea to deal with the economic fall-out caused by the novel coronavirus. But eventually there will be implications in the primary and secondary markets.
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