Ginnie Mae will begin taking requests for assistance from issuers who, having exhausted all other options, are having trouble advancing borrowers' principal-and-interest payments to investors amid the pandemic.
The share of borrowers seeking payment relief rose more than tenfold as COVID-19 concerns grew and authorities encouraged the practice, according to the Mortgage Bankers Association.
Ginnie Mae and the FHA provided temporary liquidity relief for mortgage servicers bracing for higher delinquencies, but the industry continues to pressure Treasury and the Fed to provide more comprehensive support.
The agency has relaxed some reporting requirements and joined other regulators in encouraging banks to help borrowers, but pressure is building on the bureau to do more to aid consumers suffering financial hardship.
Homeowners reeling from coronavirus-induced economic shock are already enduring extremely long wait times while trying to get relief. Legislation passed last week could worsen the logjams.
The impending wave of loan delinquencies because of the coronavirus hurt private mortgage insurer earnings, but the companies will still have sufficient capital, a Keefe, Bruyette & Woods report said.
The government is cushioning the impact of the coronavirus on consumers, but independent mortgage bankers need funding to deal with increased levels of servicing advances because of forbearances.
Treasury Secretary Steven Mnuchin reiterated Thursday that he wants U.S. financial markets to remain open even as the coronavirus fuels wild volatility, while adding that he's focused on helping mortgage firms expected to be hit hard by the pandemic’s spreading economic pain.
JPMorgan Chase, Wells Fargo, Citigroup and U.S. Bancorp, along with 200 state-chartered banks and credit unions, have agreed to let borrowers skip payments for 90 days if their finances have been upended by the pandemic.
The Department of Housing and Urban Development's 60-day foreclosure halt for Federal Housing Administration borrowers is too short to help reverse mortgage borrowers, a letter from consumer groups stated.