Record-low mortgage interest rates powered a surge in refinance activity in agency mortgage-backed securities platforms during the second quarter of 2020, according to a new Inside Mortgage Trends analysis.
“CRT secondary markets have remained open throughout this crisis,” Freddie Mac's Mike Reynolds told Inside Mortgage Finance. “They were dramatically impacted by the COVID liquidity technical, as all markets were, but I think its important for your readers to know that trading still occurred."
Although the outlook for mortgage-investing REITs has improved since the Fed began buying agency MBS in March, it has not necessarily been evident in their dividends.
According to figures compiled by Inside Mortgage Finance, consumers owe roughly $11.168 trillion on their home mortgages, which (based on the MBA measurement) means $947.1 billion in residential debt is at risk.
Timing is everything. The majority of the loans, 63.0%, went into forbearance status in April and many of these borrowers may have already made their May payment.
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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