However, there’s a catch to the Ginnie number. Servicers of government product, especially depositories with a balance sheet, increasingly are buying delinquent FHA and VA loans out of MBS pools as a way to save money and possibly rehabilitate them down the road.
So why release yet another preliminary figure? “Today’s announcement was made in connection with financial disclosures the company was required to provide to bondholders,” Rocket said in a statement. The bonds, however, are privately held.
There’s a big disparity between default rates on Fannie/Freddie loans and government-insured loans in Ginnie MBS. The combined total delinquencies for the government-sponsored enterprises was 4.13%, compared with Ginnie’s 10.81%.
The one truism about mortgage banking that everyone knows: It’s a highly cyclical business that lives and dies on two central factors, interest rates and employment.
Thanks to the economic carnage caused by the pandemic, interest rates continue to drift lower, with some originators offering 30-year FRMs at under 3.0% and 15-year mortgages below 2.0%.
Christopher Stanley, a security engineer at SpaceX, is the first member of Elon Musk’s Department of Government Efficiency to join a GSE board.
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