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%.
For HUD, the central question boils down to this: Will the MMIF have enough cash on hand to weather what could turn out to be a delinquency tsunami on the FHA book of business?
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
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