Ginnie Mae has extended relief aimed at addressing the impact of forbearance on mortgage companies’ ability to meet typical delinquency thresholds for the third time, pushing the deadline further into next year.
The insurer of securitizations backed by certain types of government loans is giving issuers an additional six months of leeway for mortgages made on or after April 2020 to account for temporary payment suspensions offered to borrowers with pandemic-related hardships.
The move suggests Ginnie doesn’t expect to see loan performance return to normal levels until next summer. A wave of forbearance expirations is nigh, but some officials have called for the extension of some deadlines associated with pandemic-related payment relief.
“Ginnie Mae will provide this exclusion automatically through July 31, 2022 to issuers that were compliant with…delinquency rate thresholds as demonstrated by their April 2020 investor accounting report,” according to a memorandum published Monday.
The April 2020 investor accounting report reflects mortgage performance data from March 2020. March 2020 marks the month when coronavirus infections were just beginning to spread in the United States. Ginnie, an arm of the Department of Housing and Urban Development, originally set the temporary relief for delinquency thresholds to end on Dec. 31, 2020. Prior to the latest extension, the relief was slated to end Jan. 31, 2021.
Federal Housing Administration and Department of Veterans Affairs loans securitized through transactions Ginnie insures constitute more than 40% of the forbearances in the market, according to Black Knight’s latest weekly report. At last count, FHA and VA loans made up 650,000 of the more than 1.6 million forbearances outstanding.