In an industry update, Keefe, Bruyette & Woods predicts it may still take some time before the establishment of an emergency funding facility for residential servicers with MBS payments coming due.
An FHFA spokesperson said that, while Director Mark Calabria hasn’t issued a specific directive on providing credit, he has made it very clear that Fannie and Freddie must prioritize their own safety and soundness.
Analysts estimate that GSE forbearance programs will ultimately cost servicers between $80 billion and $150 billion in advances and escrow payments, bolstering the theory that only the Federal Reserve has the wherewithal to provide interim financing.
In a survey of its members last week, the Mortgage Bankers Association found that the percentage of loans in forbearance rose from just 0.25% on March 2 to 2.66% by April 1, nearly a tenfold increase.