Ginnie Mae Mortgage Bonds Saddled by Forbearance and Buyout Risk
- Ginnie buyouts surged in June, leading to prepayment boost
- Ginnie/Fannie 3% coupon swap lowest in at least half a decade
This article is for subscribers only.
Homeowner forbearance requests in Ginnie Mae-backed mortgages have led to elevated buyouts and weighed on their performance, a trend that may continue through summer’s end.
The Coronavirus Aid, Relief, and Economic Security Act, signed into law on March 27, allows any U.S. homeowner with a taxpayer-backed mortgage to demand forbearance and stop paying their loan for six months, with the option to extend it for another six months. At this time just shy of 4 million homeowners are in forbearance.