Retail-originated refi production was particularly strong at the GSEs, climbing 160.5% from the first to the second quarter. By contrast, deliveries of retail refi loans rose 30.5% at Ginnie Mae, where total MBS issuance increased more modestly...
However, there’s a catch to the Ginnie number. Servicers of government product, especially depositories with a balance sheet, increasingly are buying delinquent FHA and VA loans out of MBS pools as a way to save money and possibly rehabilitate them down the road.
According to Dave Stevens, a former FHA commissioner, DPA provided by government entities, such as Chenoa, is one of the only scalable options to help those without the means to purchase a property.
There’s a big disparity between default rates on Fannie/Freddie loans and government-insured loans in Ginnie MBS. The combined total delinquencies for the government-sponsored enterprises was 4.13%, compared with Ginnie’s 10.81%.
New VA home guaranty business continued to boom, rising 21.8% from the first quarter to a record $100.52 billion. But FHA single-family endorsements fell 5.9% to $73.19 billion over that period.
For HUD, the central question boils down to this: Will the MMIF have enough cash on hand to weather what could turn out to be a delinquency tsunami on the FHA book of business?
With FHA late payments accelerating in the wake of the coronavirus pandemic, all eyes turn to the financial health of the Mutual Mortgage Insurance Fund. Is it time to worry?