Designed to aid MBS issuers hurt by the pandemic, the Ginnie Mae PTAP has received high marks thus far. Details about usage could be released before the weekend starts.
Ginnie Mae came to the rescue of a handful of MBS issuers with its PTAP program. Meanwhile, Fannie/Freddie issuers needing cash because of the pandemic have some new options, but will they be used?
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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