How Federal Actions Helped Keep Americans Home


The Housing Finance Policy Center has published Housing finance at a glance: a monthly chart collection, February 2021, who includes updated numbers to give detail the origination volume, the proportion of loans in serious default or foreclosure, spreads on GSE risk transfer securities and a specific feature on GSE credit data at the loan level.

Among the highlights of the report, it was noted that the Biden administration extension of the mortgage abstention period for supported by the federal government mortgages To helped more than 300,000 Americans during the pandemic. The extension was for borrowers who Enters abstention plans before June 30, 2020 can now be forbidden for up to 15 months, and new borrowers can opt out no later than June 30, 2021.

“Since peaking at 6.4% in May 2020, GSE’s abstention rate has fallen to 3.0% in February 2021,” according to the report. “About two-thirds of the GSE loans that were on hold left the program. Very few of those who came out are still in pain or in loss mitigation. A larger share of those who came out of forbearance paid off their mortgage early (14% of GSE loans never abstained). The majority of those who came out of abstention are current, representing 47% of all GSEs loans still in abstention, most of these320 856 borrowers-eregistered for COVID-19 deferral of payment Pprogram from January 2021; this represents 1.4% of all GSE loans. “

Agents work with borrowers at national scale to help repay the waived amount. One of these options offered by Fannie Mae and Freddie Mac is the COVID-19 Postponement Program. A mortgage loan modification will be considered for borrowers who cannot make their old payment, which would further reduce their payment.

Although borrowers with the highest score represent half of COVID-19 deferral payment program participants, the program has helped homeowners with lower FICO scores. The typical deferred amount during forbearance is small, $ 6,000, which is 2.1% the original default value of the house, according to the report.

The Chartbook also dived deeper into the record year that was 2020 for first privilege origins, wwith $ 4.04 trillion in mortgages issued in 2020, This number exceeds 2003‘s volume of $ 3.73 trillion, the previous record holder of $ 315 billion.

In terms of distribution, tThe share of portfolio assemblies was 21.5% in 2020, a substantial drop of 35.9% Last year. GSE 2020 share is up sharply to 59.2%, against 42.9% in 2019. The FHA / VA share at the end of 2020 was 18.4%, down 1% compared To 2019. The share of private securities (PLS) was 0.9% in 2020, compared to 1.9% in 2019, and a fraction of its share in the years leading up to the bubble.

Lower share of portfolio and PLS in 2020 reflects impact of COVID-19, which made origin difficult mortgages without government supportThe report revealed. “The higher share of GSE reflects the large number of refinancing operations carried out through this channel. As private capital shrinks dramatically due to the economic downturn, the federal government is once again playing the role of dominant role in the mortgage market.

Click here to concern “Housing Finance at a Glance: A Monthly Chartbook, February 2021.”

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