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DS5: Delving into the Fed’s Response to the Mortgage Industry

Get the latest on mortgage rates and RMBS in a new episode of DS5: Inside the Industry. In this episode, hear from John Lynch, CEO and founder of PCMA, and Holden Lewis, a housing and mortgage Specialist for Nerd Wallet.

Lynch, an executive member of the Non-Prime Lending Council, brings updates on how the industry is working with borrowers to ensure there are no disruptions in service during this time.

Lynch notes that “we’re waiting for the Fed to step in and support non-agency RMBS,” though he notes that it is probably low on list of Fed’s priorities. According to to the FHFA, when a mortgage is in a mortgage-backed security (MBS), Fannie Mae servicers with a scheduled payment are responsible for advancing the principal and interest payment regardless of borrower payments.

Later on, Lewis will be discussing mortgage rate trends in the months ahead. He will also discuss the Fed’s announcement to purchase MBS to stabilize the mortgage market.

The FHFA is currently instructing the GSEs to main loans in COVID-19 forbearance plans in MBS pools for at least the duration of the forbearance plan.

Mortgages that are delinquent for more than four months, historically, were purchased out of MBS pools by the GSEs. Loans with COVID-19 payment forbearance shall be treated “like a natural disaster event” and will remain in the MBS pool.

You can watch the full episode here or at the embed below.

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.
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