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.
The Federal Reserve's revived MBS purchase program will likely absorb half of new monthly issuance, crowding out other investors that have carried the market for the past two years. (Includes two data charts.)
Industry-wide holdings of residential MBS were steady in the fourth quarter, but several REITs shifted their focus to non-agency MBS and other investments. (Includes data chart.)
Foreign investors boosted their holdings of U.S. agency MBS by 13.4% from June 2018 to the middle of last year, with big gains posted by Japan and China. (Includes data chart.)
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