With lenders pushing mortgages that include a temporary buydown feature, MBS investors are pondering prepayment behavior for the loans. Expect loans with temporary buydowns to exhibit prepayment speeds similar to ARMs, according to an industry analyst.
Servicers will now have a shorter wait time to deliver reperforming loans back into Ginnie MBS, and the loans will no longer have to go into special RG pools. The changes are aimed at increasing liquidity for Ginnie issuers. (Includes data chart.)