Fannie Mae-No Politics (FNMA)

[YanksGhost]

Thanks for posting Glen's excellent and largely on the mark analysis released late yesterday. The full article is linked on Seeking Alpha with additional content. His main point is what I posted most of the day, yesterday: that the 50 BP levy is all about greasing the skids for the IPOs and has nothing to do with cost recovery.

Here's the part Glen missed. The FNMA and FMCC Covid-19 Forebearance Plans are all based on PAYMENT DEFERRAL, not payment forgiveness. There is no cost to the GSEs; all the costs are either reimbursed by the mortgagee or the servicer via loan modifications. The Regulator is mandating a fee to be paid by homeowners who are able to meet their payment obligations and are refinancing, demanding that they pay for illusory costs to benefit FnF. This is a backdoor, sneaky equivalent of increasing G fees by camouflaging the gambit as virus-related costs. This is unadulterated bullshit.

The Fed is signaling a zero interest rate plan for the next 5 years. So there is no cost-of-money risk on defferrals. Calabria better not even try to go down that rabbithole.

Dr. Mark Calabria needs to be fired for this delusional subterfuge.