Morning Report: Ginnie Mae extends help to servicers

Vital Statistics:


Last Change
S&P futures 2769 -10.1
Oil (WTI) 23.03 0.29
10 year government bond yield 0.75%
30 year fixed rate mortgage 3.37%


Stocks are down this morning on no real news. Bonds and MBS are flattish


As the COVID-19 crisis seems to have peaked, Washington is starting to think about how to get people back to work and the economy restarted. Dr. Fauci discussed that we could start reopening parts of the economy next month, although we have seen some instances overseas where the virus re-started.


Earnings season starts this week with the big banks all reporting. Analysts don’t have a clue as to how to handle guidance in this environment. The big question with the banks will be how many borrowers are requesting forbearance. So far, no help seems to be coming, at least from Fannie and FHFA.


JP Morgan has tightened up credit requirements – instituting minimum FICOs of 700 and minimum down payments of 20%. This doesn’t apply to its low income programs (JPM doesn’t really do FHA) but this is a good indication of where things are headed across the industry. A massive tightening of mortgage credit was definitely NOT what Congress had in mind when it drafted the CARES Act, but the unintended consequences are probably not going to stop there.


Good news for Ginnie Mae servicers: Ginnie Mae will advance P&I payments for delinquent borrowers under the Pass-Through Assistance Program (PTAP). Servicers can request once per month for Ginnie to advance P&I on their MBS. Servicers would still have to handle escrows. Prepayments should help Ginnie servicers get through April, and maybe even May. It won’t solve the issue for Fannie and Freddie issuers, but it is a start.


Freddie Mac is extending further help to borrowers affected by COVID-19 including loan modifications typically only used during natural disasters.

3 Responses

  1. I’m not qualified really to comment on the economic impact of the various puzzle pieces at play. Most of what you say Brent goes right over my head. I know how to deal with our personal and business finances and how to keep the books but otherwise I’m clueless.

    I do however have a few things to say regarding getting back to some semblance of ramping up our economy again and hopefully it will be incremental. Trust me, I can’t wait for our customers to open up again and maybe pay us what they owe us? Luckily, we had a decent order today from Taiwan for our Tennis Ball Saver so we’re still able to pay our current bills. Unfortunately, he wiped us out of product and we have to place a new order to the tune of about $10,000 and have no clue if we’ll get the orders to support the incoming inventory. We’re also anxiously waiting for (just kidding) our order from Taiwan to arrive and go through customs. We don’t actually need any of it now, since we’re really not selling much (other than the Taiwan order which has nothing to do with the order from Taiwan……..LOL). We had to pay for it ahead of time though so at least if we sell any of it…………..we’re solid!

    I continue to be impressed with my state’s governor and our early stay at home orders, we’ve definitely flattened the curve here.

    I was a little pissed this afternoon watching Trump’s campaign commercial from the WH Corona Virus Briefing Room and noticed that while several governors, including mine, were appreciative of the Federal help we received who also made a HUGE effort to keep this historic event non-political, Trump turned their comments into a political moment. I doubt he’ll receive the same kind of verbal support he’s received again. I sure wouldn’t play that game with him.

    Also, CA is importing a huge number of N95 masks (millions) from a factory in China, using our enormous buying power as the 5th largest economy in the world. We have both scientists and our task force members on the ground assuring that the contract is met in the time frame and numbers agreed upon and also assuring that their quality meets with FDA and other health standards. We’ll share with the rest of the country.

    Also, while the Eastern corridor (NY, NJ, CT, etc) are putting together a group of folks to figure out the next step (relaxing mitigation) and the Federal government is doing the same, here in CA (in talks with OR and WA) we have a framework designed already and we’ll see the details of it tomorrow. Ahead of the curve again! You can thank us later…..LOL


  2. “Fla. governor deems World Wrestling Entertainment ‘essential business’”

    God damn right. It’s the backbone of ‘merica.

    Liked by 1 person

  3. The Sam Stein assertion made me laugh.


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