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Another record low mortgage rate just caused demand to jump for both refinances and home purchases
PUBLISHED WED, NOV 25 20207:00 AM ESTUPDATED 36 MIN AGO
Diana Olick
@IN/DIANAOLICK
@DIANAOLICKCNBC
@DIANAOLICK
KEY POINTS
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.92% from 2.99%.
Mortgage applications to purchase a home rose 4% for the week and were 19% higher than the same week one year ago.
Another record low mortgage rate causes mortgage demand to rise
Mortgage interest rates have set record lows more than a dozen times this year, and last week there was yet another. That caused mortgage application volume to increase 3.9% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
Refinance applications led the way, climbing 5% for the week to the highest pace since last April. Volume was 79% higher than the same week one year ago. The refinance share of mortgage activity increased to 71.1% of total applications from 69.8% the previous week.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to a survey low of 2.92% from 2.99%, with points falling to 0.35 from 0.37 (including the origination fee) for loans with a 20% down payment.
“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and a resurgence in Covid-19 cases around the country,” said Joel Kan, MBA’s associate vice president of industry and economic forecasting.
While more than 4 million borrowers have already refinanced their home loans so far this year, over 19 million more could still save substantially on their monthly payments through a refinance, according to a recent calculation by Black Knight, a mortgage technology and data provider. Today’s average mortgage rate is about a full percentage point lower than it was a year ago.
Homebuyers are also getting added incentive from today’s rates, despite sharp increases in home prices. Mortgage applications to purchase a home rose 4% for the week and were 19% higher than the same week one year ago.
“Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months,” Kan said.
According to boardpost Credit Suisse now at $30, Piper at $27.
As an owner of P escrows I am skeptical of any mandatory share for value deal. First, nothing in the POR or GSA seems to indicate that was contemplated or was the understanding. Is there a provision I have overlooked? Second, it seems to be the consensus that whatever assets are in safe harbor for escrow holders were never assets of the Liquidating Trust. If so, then the LT could not agree on behalf of escrow holders to a share for value deal with WMIH (renamed Mr. Cooper Group) because the LT didn't have "jurisdiction" over those assets. When and where did we give such authority to anyone to deal on escrow owners behalf. Moreover, where is it written or agreed to that say the majority of escrow holders could bind the minority to such a deal? Third, the POR did give the LT authority to settle litigation. But wouldn't any dispute over these assets have been settled with the GSA before the LT was even established? So it seems the LT would have no say under this power because any such deal would have already been determined. Fourth, the POR gives WMIH control over litigation proceeds. But how does this give WMIH the power to decide what escrow holders will accept dollar wise or in shares for their interests? How can WMIH force any escrow shareholder to sell their interests in the assets, yet alone determine the value that escrow holders must take? Fifth, it seems to me that these assets would have been in corporate or trust entities. If so, the charters of those entities if no longer in existence (i.e. dissolved) would dictate how distributions would be made to escrow holders or perhaps the underlying prospectuses spell the distribution out. But if those entities still exist, then it would seem escrow holders own not the assets within those entities but the ownership of the corporation or trust that has legal title to those assets. Sixth, how does the fact that institutions like Blackrock or stone? recently increased their position in Coop? If dilution is indeed contemplated why buy more shares before the dilution? Seventh, has a similar share for value event like this involving an nol ever happened before with a different company? Did the IRS give guidance on such a transaction? It seems to me at this point that the extent of the ownership change would determine only if more nols are available for utilization. The rules say that there is a three year rolling time frame whereby the institutions could increase their ownership in WMIH without affecting the NOL. Which the institutions did. So why would the institutions agree to dilute their respective interests at this point to their detriment? Seems to me the institutions have the wherewithal to loan WMIH the money to buy any such assets and charge 10 per cent interest to protect their interests. jmho.
Executive Order 11110
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Executive Order 11110 was issued by U.S. President John F. Kennedy on June 4, 1963.
This executive order amended Executive Order 10289 (dated September 17, 1951)[1] by delegating to the Secretary of the Treasury the president's authority to issue silver certificates under the Thomas Amendment of the Agricultural Adjustment Act, as amended by the Gold Reserve Act. The order allowed the Secretary to issue silver certificates, if any were needed, during the transition period under President Kennedy's plan to eliminate Silver Certificates and use Federal Reserve Notes.[2]
Contents
1 Background
2 Public Law 88-36
3 Text of Executive Order
4 Revocation
5 JFK assassination theory
6 See also
7 References
8 External links
Background
On November 28, 1961, President Kennedy halted sales of silver by the Treasury Department. Increasing demand for silver as an industrial metal had led to an increase in the market price of silver above the United States government's fixed price. This led to a decline in the government's excess silver reserves by over 80% during 1961. Kennedy also called upon Congress to phase out silver certificates in favor of Federal Reserve notes which, according to the Associated Press at that time, were still backed by gold.[3][4]
Kennedy repeated his calls for Congress to act on several occasions, including his 1963 Economic Report, where he wrote:[5]
I again urge a revision in our silver policy to reflect the status of silver as a metal for which there is an expanding industrial demand. Except for its use in coins, silver serves no useful monetary function.
In 1961, at my direction, sales of silver were suspended by the Secretary of the Treasury. As further steps, I recommend repeal of those Acts that oblige the Treasury to support the price of silver; and repeal of the special 50-percent tax on transfers of interest in silver and authorization for the Federal Reserve System to issue notes in denominations of $1, so as to make possible the gradual withdrawal of silver certificates from circulation and the use of the silver thus released for coinage purposes. I urge the Congress to take prompt action on these recommended changes.
Public Law 88-36
The House of Representatives took up the president's request early in 1963,[6] and passed HR 5389 on April 10, 1963, by a vote of 251 to 122.[7][8] The Senate passed the bill on May 23, by a vote of 68 to 10.[9][10]
Kennedy signed the bill into law on June 4, 1963 and, on the same day, signed an executive order (11110) authorizing the Treasury Secretary to continue printing silver certificates during the transition period.[11][12] The act, which became Public Law 88-36 (77 Stat. 54), repealed the Silver Purchase Act of 1934 and related laws, repealed a tax on silver transfers, and authorized the Federal Reserve to issue one- and two-dollar bills, in addition to the notes they were already issuing.[13] The Silver Purchase Act had authorized and required the Secretary of the Treasury to buy silver and issue silver certificates. With its repeal, the President needed to delegate to the Treasury Secretary the President's own authority under the Agricultural Adjustment Act.[14]
Text of Executive Order
President Kennedy's Executive Order (E.O.) 11110 modified the pre-existing Executive Order 10289 issued by U.S. President Harry S. Truman on September 17, 1951, and stated the following:[15]
The Secretary of the Treasury is hereby designated and empowered to perform the following-described functions of the President without the approval, ratification, or other action of the President...
E.O. 10289 then lists tasks (a) through (h) which the Secretary may now do without instruction from the President. None of the powers assigned to the Treasury in E.O. 10289 relate to money or to monetary policy.
President Kennedy's E.O. 11110, in its entirety, follows:
SECTION 1. Executive Order No. 10289 of September 19 [sic], 1951, as amended, is hereby further amended --
(a) By adding at the end of paragraph 1 thereof the following subparagraph (j):
"(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption," and
(b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof.
SEC. 2. The amendment made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.
JOHN F. KENNEDY
THE WHITE HOUSE,
June 4, 1963
Revocation
In March 1964, Secretary of the Treasury C. Douglas Dillon halted redemption of silver certificates for silver dollars.[citation needed]
On June 24, 1968, all redemption in silver ceased.[citation needed]
In the 1970s, large numbers of the remaining silver dollars in the mint vaults were sold to the collecting public for collector value.[citation needed]
In 1982, Congress repealed the remaining legislative authority behind E.O. 11110 with the passage of Pub.L. 97–258.[citation needed]
On September 9, 1987, as part of a general clean-up of executive orders, President Ronald Reagan issued Executive Order 12608, which removed the text which had been added to E.O. 10289 by E.O. 11110. Specifically, E.O. 12608 revoked subparagraph (j) of paragraph 1 of E.O. 10289, as amended by E.O. 11110.[16]
Although E.O. 12608 explicitly revoked the relevant portion of E.O. 10289 which had been added by E.O. 11110, thereby effectively revoking E.O. 11110 as such, the original legislative authority underpinning the order had, of course, already been nullified five years earlier, back in 1982.[citation needed]
JFK assassination theory
See also: John F. Kennedy assassination conspiracy theories § Federal Reserve conspiracy
Jim Marrs, in his book Crossfire, presented the theory that Kennedy was trying to rein in the power of the Federal Reserve, and that forces opposed to such action might have played at least some part in the assassination.[17][18][19] Marrs alleges that the issuance of Executive Order 11110 was an effort by Kennedy to transfer power from the Federal Reserve to the United States Department of the Treasury by replacing Federal Reserve Notes with silver certificates.[18] Author Richard Belzer named the responsible parties in this theory as American "billionaires, power brokers, and bankers ... working in tandem with the CIA and other sympathetic agents of the government."[20]
Critics of the theory note that Executive Order 11110 was a technicality that only delegated existing presidential powers to the Secretary of the Treasury for administrative convenience during a period of transition.
FAQ 12
What if I am unsure whether I am included in the Settlements?
If you are not sure whether you are included in the Settlements, or whether the U.S. Dollar LIBOR-Based Debt Security that you held during the Class Period is covered by these Settlements, you may call 1-888-205-5804 with questions, or you may also write with questions to Bondholder LIBOR Settlement, Claims Administrator, P.O. Box 3076, Portland, OR 97208-3076.
https://www.sec.gov/Archives/edgar/data/933136/000115752318002024/a51880658.htm
Item 5.03.
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
In connection with the previously announced 1-for-12 reverse stock split (the “Reverse Stock Split”) of its shares of common stock, par value $0.00001 per share (the “Common Stock”), Mr. Cooper Group Inc. (f/k/a WMIH Corp.) (the “Company”) has filed two amendments to its certificate of incorporation with the Delaware Secretary of State (the “Amendments”). Together, the Amendments, effective as of 12:01 AM and 12:02 AM Eastern Time, respectively, on October 10, 2018 (the “Effective Time”), (i) converted every twelve shares of the Company’s issued and outstanding Common Stock into one share of Common Stock, with an increased par value of $0.01 per share and (ii) changed the name of the Company from WMIH Corp. to Mr. Cooper Group Inc
. Pursuant to the Amendments, any fraction of a share of Common Stock that would otherwise have resulted from the Reverse Stock Split will be settled by cash payment from the transfer agent after the transfer agent sells such fractional shares on the basis of prevailing market prices of the Common Stock at the time of the sale.
If you do a search at this Delaware site you will find that there is no corporation named WMIH anymore. The name was changed to Mr. Cooper Group, Inc. in July, 2018.
https://icis.corp.delaware.gov/ecorp/entitysearch/NameSearch.aspx
Imo the best argument that something may be coming back is that the LT in their appellate response beats around the bush and does not just come out and directly state the escrow cusips are worthless. Such a simple statement would have nipped most of Alice's arguments in the bud. Yet it was not made. Instead Alice is challenged to find a source of recovery. Why? Well lawyers can get in trouble if they state mistruths in court filings.
In response to your effort to disprove AZ review the following:
Definition of the 'Reorganized Debtor' a/k/a wmih at Section 1.192 of the POR
"WMI, on or after the Effective Date, which shall include one hundred percent (100%) of the equity interests of WMI Investments, WMMRC, and subject to the abandonment of the equity interests of WMB, WMB."
mordicai Tuesday, 09/10/19 01:45:49 PM
Re: None 0
Post #
587317
of 635065
Page 84 of the disclosure statement:
In February of 2006, Washington Mutual Preferred Funding LLC (“WMPF”) was formed
to issue securities qualifying for regulatory capital under applicable banking rules and regulations. The
only assets of WMPF were indirect interests in various residential mortgage and home equity loans and
other permitted investments. In 2006 and 2007, WMPF issued approximately $4,000,000,000 liquidation
preference value of perpetual fixed and fixed-to-floating rate preferred securities (representing 40,000
shares) which were acquired by various issuer trusts which issued the Trust Preferred Securities in a like
amount to investors. Specifically, the Trust Preferred Securities include those certain (i) Washington
Mutual Preferred Funding (Cayman) I Ltd. 7.25% Perpetual Non-Cumulative Preferred Securities, Series
A-1, (ii) Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-Cumulative Preferred
Securities, Series A-2, (iii) Washington Mutual Preferred Funding Trust I Fixed-to-Floating Rate
Perpetual Non-Cumulative Trust Securities, (iv) Washington Mutual Preferred Funding Trust II Fixed-toFloating Rate Perpetual Non-Cumulative Trust Securities, (v) Washington Mutual Preferred Funding
Trust III Fixed-to-Floating Rate Perpetual Non-Cumulative Trust Securities, and (vi) Washington Mutual
Preferred Funding Trust IV Fixed-to-Floating Rate Perpetual Non-Cumulative Trust Securities.
On September 26, 2008, pursuant to a letter from the OTS, dated September 25, 2008,
WMI issued a press release stating that it had exchanged the Trust Preferred Securities issued by WMPF
for 4,000,000 depositary shares, each representing 1/1,000th of a share of a related class of WMI’s
preferred stock, as applicable, of Perpetual Non-Cumulative Fixed and Fixed-to-Floating Rate Preferred
Stock in Series I, J, L, M and N49 (defined in the Seventh Amended Plan as the “REIT Series”)—none of
which were outstanding prior to September 25, 2008. At the direction of the OTS, on September 25,
2008, employees of WMI and WMB executed an Assignment Agreement, which purported to assign the
right, title, and interest in the Trust Preferred Securities to WMB as of that date.
The Trust Preferred Securities were subject to a conditional exchange feature whereby
they would be transferred to WMI and the prior holders would receive, in exchange, the REIT Series,
upon the occurrence of an “Exchange Event,” defined as, among other things: (i) the undercapitalization
of WMB under OTS’ “prompt correction action” regulations, (ii) WMB being placed into receivership, or
(iii) the OTS, in its sole discretion, directing the exchange in anticipation of WMB becoming
“undercapitalized” or the OTS taking supervisory action limiting the payment of dividends by WMB.
Pursuant to the Global Settlement Agreement, and as more fully set forth therein
(a) JPMC or its designee will be deemed to be the sole legal, equitable and beneficial owner of the Trust
Preferred Securities, (b) the WMI Entities will be deemed to have sold, transferred, and assigned any and
all right, title and interest the WMI Entities may have or may ever have had in the Trust Preferred
Securities, (c) any obligatio[color=red][/color]n of WMI to transfer the Trust Preferred Securities to WMB, including in
accordance with that certain Assignment Agreement will be deemed to have been fully satisfied by the
contribution to WMB of the Trust Preferred Securities as of September 25, 2008 and thereafter sold and
transferred to JPMC in accordance with the Purchase and Assumption Agreement, and (d) all Claims
against the Debtors, the WMI Entities, the JPMC Acquisition Entities, the FDIC Receiver, or FDIC
Corporate with respect to the Trust Preferred Securities will be released and withdrawn, with prejudice.
49 As previously stated, the Trust Preferred Securities had a liquidation preference of $4 billion. Thus, every $1,000
of principal amount of REIT Series is equal to one (1) depositary share. Every $1,000,000 of principal amount of
REIT Series is equal to one (1) share of WMI’s preferred stock.
US_ACTIVE:\43837453\28\79831.0003 85
Please refer to the Global Settlement Agreement for a complete description of the proposed resolution of
disputes relating to the Trust Preferred Securities.
Since the Petition Date, WMI has not made any distributions on or in relation to the Trust
Preferred Securities or paid any dividends on account of any class of WMI’s equity securities, including
preferred stock relating to the Trust Preferred Securities.
I concur. If it was not the same corporation, it wouldn't have the nol carryforward.
According to BP poster Yolo, the street had adjusted gross income underestimated at $1.43 per share. The number came in at $3.84 or 2.69 times greater.
Al Meshkati tweet:
According to Inside Mortgage Finance residential lenders originated an estimated $865 billion of first lien mortgages during 2nd Quarter of 2020...a 17 year high.
https://twitter.com/AMeshkati?lang=en&lang=en
Those were checking , savings, and cds owed to the customers of wmb. The monies were turned over to JPM who in turn then owed these monies to those customers.
How does Cooperman know Coop will be sitting on 1 billion cash at that time? If the origination income comes in at those levels, how does he know that Coop will not pay down debt before then ? Inside info? Also, he said he would be buying more. Well technically he could buy 1 share to make that statement true. Also, why would he want to help people that he calls the unwashed?
From Bloomberg:
Billionaire investor Carl Icahn has sold out of Hertz Global Holdings Inc., the rental-car company that filed for bankruptcy last week and counted him as its biggest shareholder.
https://www.zerohedge.com/markets/absolute-insanity-retail-investors-flood-bankrupt-hertz-make-it-most-heavily-traded-us
I can't find on the internet any indication that the fdic libor litigation in New York or London has been settled. As of 2019 both were still pending. There have been non fdic libor class action lawsuits that have been settled. I would think a press release indicating the fdic has settled will be made once it happens.
Mortgage forbearance. Forbearance is when your mortgage servicer or lender allows you to pause (suspend), or reduce your mortgage payments for a limited period of time while you regain your financial footing. Forbearance does not forgive any part of the debt.
I think this relates to how the loans of bankrupt individuals were handled/serviced by Nationstar while those individuals were under bankruptcy protection. If it had anything to do with the WMI bankruptcy, it would have been resolved before that bankruptcy closed before Walrath not the U.S. Trustee.
I think Coop is well situated to absorb servicers with liquidity problems. My concern is whether Coop would report such additions. An outright acquisition of a servicer I believe would have to be reported upon closing. But what if Fannie or Freddie pulls servicing and or subservicing from these servicers and just assigns the contracts to Coop because of the failure to perform by the other servicers? Would that have to be reported? Would it even be considered material if such assignments were done piecemeal given Coop has 3.5 billion plus servicing contracts already? I could see the government wanting to consolidate their servicing contracts among a few big banks and servicers to obtain consistency and greater control. On another note, what kind of fees does Coop get to charge on modification of these loans in forbearance? Can we expect to be kept in the dark until the next earnings conference?
I agree the client was the equity committee and the firm cannot disclose information to others. Now that the equity committee has been disbanded, I doubt the equity committee members unanimous consent to allow the firm to disclose would enable disclosures to take place. Here is a good article on the subject.
https://www.nolo.com/legal-encyclopedia/attorney-client-privilege.html
CNBC TV
SEARCH QUOTES
REAL ESTATE
Fannie and Freddie will now buy loans in mortgage bailout program, in a bid to loosen lending
PUBLISHED WED, APR 22 202011:07 AM EDT
Diana Olick
@IN/DIANAOLICK
@DIANAOLICKCNBC
@DIANAOLICK
KEY POINTS
The Federal Housing Finance Agency announced that Fannie Mae and Freddie Mac will now buy home loans that go into the government’s forbearance program just after they close.
Fannie and Freddie had not been doing that, and as a result, lending had tightened up dramatically.
“Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending,” said the FHFA’s director.
GP: Freddie Mac Headquarters As Fannie, Freddie Allowed To Boost Capital Buffers By Billions - 106480402
Signage stands outside the Freddie Mac headquarters in McLean, Virginia, U.S., on Tuesday, Oct. 1, 2019.
Andrew Harrer | Bloomberg | Getty Images
The Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac, announced that the two mortgage giants will now buy home loans that go into the government’s forbearance program just after they close.
Fannie and Freddie had not been doing that, and as a result, lending had tightened up dramatically.
“We are focused on keeping the mortgage market working for current and future homeowners during these challenging times,” FHFA Director Mark Calabria in a release. “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending.”
Mortgage lenders, both bank and non-bank, sell most of their loans to either Fannie Mae or Freddie Mac, known as government-sponsored enterprises, or GSEs. Or, if they are backed by the FHA, they are sold to Ginnie Mae. It can take a few weeks after a loan closes for it to be sold. When the government’s mortgage bailout, which started just over a month ago, some loans that had just closed but were not purchased yet went into forbearance.
The forbearance program allows borrowers with economic hardship due to Covid-19 to delay monthly payments for up to a year. Those payments must be made at a later date. The CARES Act, which was signed into law late last month, does not require that borrowers provide any documentation or proof of hardship.
More than three million loans are already in the forbearance program. Because Fannie and Freddie wouldn’t buy the loans that had just closed, credit tightened up dramatically, making it harder to get a new loan for all borrowers. Lenders were afraid any loans they made might go into forbearance before they were sold, leaving them on the hook, unable to sell them.
This announcement should loosen the market somewhat, although there are certain eligibility criteria and limits, according to FHFA:
The mortgage loan must have closed on or after February 1, 2020 and on or before May 31, 2020.
The loan must be a mortgage purchase transaction or a no-cash-out refinance
The loan cannot be more than 30-days delinquent.
In addition, eligible loans will be assessed an additional loan-level price adjustment – 5% for first-time homebuyers and 7% for non-first time buyers.
There is disagreement, however, on what these higher costs could do to mortgage rates. Some say they could cause mortgage rates to fall slightly, as the credit box opens up more. Others say some lenders will pass those costs onto borrowers in the form of higher rates.
“We welcome the change in policy that directs the GSEs to purchase most loans in forbearance,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “We looking forward to working with FHFA and the GSEs to arrive at more appropriate pricing and broad coverage for all transaction types.”
FHFA Limits Servicer Obligations for Loans in Forbearance
Apr 21 2020, 12:05PM
The Federal Housing Finance Agency (FHFA) has clarified the obligations of Fannie Mae and Freddie Mac's (the GSEs') servicers to investors during the COVID-19 crisis. Servicers have been told to extend forbearance to homeowners who are experiencing financial distress as the result of the pandemic and, as of last Friday, approximately 5 percent of GSE loans had entered forbearance agreements.
Servicers are contractually required to forward monthly principal and interest payments to mortgage-backed security (MBS) investors even when homeowners are not making payments on the underlying loans. While servicers maintain reserves for this purpose, it has been feared that the expected high utilization of forbearances may become an unmanageable burden, especially for smaller companies.
Today's information from FHFA makes it clear that the rules applied to servicers of GSE-backed loans in the case of natural disasters will apply to the declared COVID-19 emergency. Servicers need only advance interest payments for loans that have missed payments for four months. This brings the obligation limit for Fannie Mae loans and servicers into alignment with the current policy at Freddie Mac.
"The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5 trillion Enterprise-backed housing finance market," said FHFA Director Mark Calabria. "Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment."
Mortgage loans that are delinquent for more than four months are typically purchased out of MBS pools by the Enterprises, however, under natural disaster rules, loans remain in those pools even as the GSEs take over responsibility for investor payments. Today's memorandum instructs services to treat the current situation as a disaster and leave loans in their existing pools. This change reduces the potential liquidity demands on the GSEs from purchasing large numbers of delinquent loans and loans in forbearance during the COVID-19 crisis.
The announcement says that FHFA and the GSEs will continue to monitor the impact of the coronavirus national emergency on the housing finance market and update policies as necessary.
Read the FHFA Release
http://www.mortgagenewsdaily.com/04212020_covid_19_responses.asp
With respect to the government backed mortgages, it is my understanding that the servicers will be reimbursed or credited for the missed payments which insurance proceeds will lag by about six months.
From most recent 8 K
As of March 31, 2020, unrestricted cash was approximately $570 million.
As of March 31, 2020, our total warehouse line capacity was $8.8 billion, unchanged from December 31, 2019. Servicing advance financing capacity was also unchanged at $900 million. Utilization for both warehouse and servicing advance lines remained in line with December 31, 2019. We are actively engaged with banking partners to proactively expand bank line capacity and assess securitization opportunities for future needs
Fannie, Freddie May Soon Buy Home Loans in Forbearance to Help Mortgage Firms, Sources Say
https://www.wsj.com/articles/fannie-freddie-may-soon-buy-home-loans-in-forbearance-to-help-mortgage-firms-sources-say-11587438302?mod=hp_lista_pos2
Contemplated move by federal regulator follows pressure from Congress and mortgage industry
By Andrew Ackerman
April 20, 2020 11:05 pm ET
A top U.S. regulator is considering taking steps to ease strains on mortgage companies facing a cash crunch as millions of Americans struggling with fallout from the coronavirus suspend their monthly payments, according to people familiar with the matter.
The Federal Housing Finance Agency is weighing whether to allow Fannie Mae and Freddie Mac, the government-controlled mortgage-finance giants, to buy home loans that recently entered forbearance, meaning borrowers have stopped making payments, the people said.
That would help nonbank mortgage companies that lend to home buyers and then quickly sell the loans to Fannie and Freddie.
The strategy was upended recently when Fannie and Freddie announced they would no longer buy loans in forbearance, leaving the debt piling up on the books of the lightly regulated companies that both originate and service home loans.
Details were still being ironed out, though FHFA was expected to announce a change as early as this week, the people said.
The agency has resisted pressure from the industry and members of Congress to help the servicers, saying it wants to see more data on the number of borrowers who are skipping their monthly payments.
“We are aware of the issue,” said Raphael Williams, a spokesman for FHFA. “Currently, we are working to find out the breadth of the issue and possible solutions.”
The mortgage companies are facing a severe cash crunch for another reason: they must continue paying investors in the loans even if homeowners suspend their monthly payments.
Millions of Americans are skipping mortgage payments as the coronavirus pandemic causes unemployment to soar.
As part of the $2 trillion stimulus package, the federal government allowed homeowners harmed by the outbreak to suspend payments for as long as a year without penalty. As of April 12, 5.95% of home loans were in forbearance, up from 3.74% on April 5, according to data released by the Mortgage Bankers Association on Monday.
That has put the squeeze on the mortgage companies, which will be on the hook for tens of billions of dollars in mortgage payments over the coming months, according to industry estimates.
Some industry officials say the move to restrict Fannie and Freddie from purchasing loans in forbearance helped fuel uncertainty over the cost of servicing new mortgages, causing a tightening of lending standards that has made it difficult for all but the most creditworthy borrowers to get a home loan.
Write to Andrew Ackerman at andrew.ackerman@wsj.com
credit goes to zxlalias on bp
The government is inducing borrowers to breach their contract with another, which is a tort. The cause of action would belong to the servicers. The problem is that under the doctrine of sovereign immunity one cannot sue the government unless the cause of action falls under the Federal Torts Claim Act. I do not think it does. However, rumor has it that aid for the servicers has been written into the senate bill for the additional monies for small business. Also, it turns out that advances need not be paid by servicers on sub-servicing contracts. That is half of Coop's contracts!
It is for a mere 15 days! It is true it can be extended up to 75 days, but ask yourself why only 15 days to begin with. Seems ominous. Extensions probably dependent on missed mortgage payment statistics and how soon the economy starts up... 4 or 8 weeks.