The gap between when prepayment proceeds are received and when the funds must be transferred to agencies provides an opportunity for servicers to use the funds for forbearance-related advance payments.
The economic damage caused by the pandemic took a bite out of Freddie’s first-quarter results. More trouble lies ahead, including forced MSR transfers.
The GSEs reportedly are in the hunt to hire special servicers to handle COVID-19-related forbearance claims. The reason: Some nonbanks may be living on borrowed time.
Mortgage bankers have been clamoring for liquidity help from the FHFA. This week, the agency delivered on the issue of the GSEs buying COVID-19-related forbearance loans, but then lenders read the fine print.
Economists at Fannie and Freddie are “relatively optimistic” about mortgage originations in 2020, despite the economic impact of COVID-19. But not if social distancing remains in place beyond May.