Ginnie Mae said it is concerned that issuers could abuse buyouts and "undermine the integrity of the MBS program."

Timing is everything. The majority of the loans, 63.0%, went into forbearance status in April and many of these borrowers may have already made their May payment.

In her letter, Rep. Waters acknowledges the need to manage the risk associated with forbearance loans, bu recommends an alternative to the steep LLPAs leveled by FHA and FHFA. Instead, the congresswoman says those costs should be spread across the agencies’ broader single-family portfolios, resulting in “near-negligible costs on any individual loan.”

The supply of single-family MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae grew another 1.4% in the first quarter, hitting $7.134 trillion.

And the good news? The company is once again originating (after suspending production in the spring) but only for Fannie Mae, Freddie Mac and FHA/VA products.

Cowen Research: "The issue is what happens in August and September if the government permits expanded unemployment benefits to expire.”

Wells Fargo was the most active servicer in repurchasing delinquent loans in May, with $2.31 billion, 50.2% of the market total. A significant share of those loans were reportedly current, the MBS disclosures show, indicating that Wells repurchased loans in forbearance.

Alterra Mortgage President Miguel Narvaez: “And what happens is that no one wants to take the risk of doing loans that FHA will not insure.”

The three agencies reported a total of 1.2 million single-family loans one payment past due, or 3.03% of their combined portfolio. Ginnie’s 4.78% 30-day delinquency rate was the highest, including a 5.68% rate for FHA loans.

Black Knight reported: “At today’s level, mortgage servicers need to advance a combined $3.5 billion a month to holders of government-backed mortgage securities on COVID-19-related forbearances."