Good Thursday A.M.,
A couple of bullet points that will tell the story…
- Yesterday, Fed Chairman Powell offered a somber expectation for an economic recovery. No V, or U, or W recovery. We are apparently off letters for the moment and into corporate symbols. The recovery is more likely to look like a Nike swoosh. Stocks took the commentary on the chin and sold off.
- Unemployment claims out this a.m., and unfortunately exceeded expectations. Another 3mm this week bringing the total job losses over 35mm.
- Equities down again today although for some reason, paring the losses from the open a bit
- The 10-yr is back to .61, mortgage bonds +12bps and rates are stable to improving.
Bigger news is that FHFA (the overlord for Fannie Mae and Freddie Mac) has provided some new guidance on what can happen at the end of a forbearance to keep people in their homes.
The Federal Housing Finance Agency yesterday said Fannie Mae and Freddie Mac will employ a new payment deferral option allowing borrowers in COVID-19 related forbearance, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity. The option will be available July 1.“For homeowners in forbearance due to COVID-19, payment deferral allows them to make up missed forbearance payments when they sell their home or refinance,” said FHFA Director Mark Calabria. “This new forbearance repayment solution responsibly simplifies options for homeowners while providing an additional tool for mortgage servicers. Borrowers who can pay their mortgage should, because missed payments remain an obligation that will ultimately have to be repaid.” A primary benefit of this option is that a homeowner’s mortgage payment will not change once the forbearance period ends.” The missed payments during forbearance will be repaid when the home is sold, the loan is refinanced, or the loan reaches maturity,”
That’s it for this a.m.
Please remain safe and stay healthy, make today great!