Ginnie Mae Proves to be the Forbearance Exception
The number of borrowers on the Coronavirus-forbearance are down but the Ginnie Mae market is proving to be an exception to the rule. The weekly report of the Mortgage Bankers Association for the week closing Sep 13 revealed a drop of 8 basis points for loans under forbearance. However, Ginni Mae’s securitized loans inched up by 3 basis points over the same period.
Ginnie Mae’s hike in forbearance share implies a retardation in the job market’s comeback, believes Mark Fratantoni, the Chief Economist of MBA. Covid-19 has thrown off-kilter the main clients of ‘Ginnie’ who happen to be low- and moderate-income borrowers. The CARES Act says that borrowers on government-approved loans can seek a moratorium of 6 months and extend it once if the situation so demands. The payment will be sought from them on a later day.
On tracking the status of loans, the MBA survey found that 67.01% were availing the extension, 31.65% were in the first 6-month phase, and 1.34% had exited forbearance only to have re-entered it.
The housing industry has been a silver lining amidst dismal performances from various sectors due to the Corona pandemic.