A look at Biden’s first week in office

This episode reviews last week’s inauguration of President Joe Biden, examining which housing issues the new administration has already taken action on.

Biden’s executive order will extend foreclosure moratorium

President Biden revealed his plan to sign 17 executive orders his first day in office, including am extension of the eviction and foreclosure moratorium to at least March 31.

If consumers aren’t holding lenders back, then who or what is?

The challenge for lenders and investors is understanding how to meet borrowers where they are without layering on risk or getting bogged down in third-party intermediation.

HomeBridge’s Brian White on diversity at a practical level

HomeBridge's Brian “Woody” White discusses ways to increase diversity within the housing finance industry.

CoronavirusPolitics & Money

Fed to buy $35.2 billion of MBS this week

The purchases are aimed at keeping credit flowing amid the spread of COVID-19

The Federal Reserve has purchased about $32.7 billion in mortgage-backed securities so far this week from Fannie Mae, Freddie Mac, and Ginnie Mae, and is slated to spend another $2.5 billion by the close of business on Friday.

The orders are being carried out by a group of market specialists who work at the Federal Reserve Bank of New York in lower Manhattan, the same team that enacted a similar quantitative easing program, known as QE, during the financial crisis more than a decade ago.

The purchases are aimed at keeping credit flowing amid the spread of COVID-19. On Sunday evening the Fed announced its second emergency cut in two weeks, slashing its benchmark rate to near zero, and announced it would buy $700 billion of Treasuries and MBS.

The last time the central bank used a QE program, it put downward pressure on mortgage rates by increasing competition of bonds. That’s likely to happen again, said Frank Nothaft, CoreLogic’s chief economist.

Rates have bumped up more than a third of a percentage point from the all-time low of 3.29% hit during the first week of March, as measured by Freddie Mac. It’s possible the Fed’s MBS purchases could drive them below 3% in coming months, Nothaft said.

“It may not be tomorrow or next week, but I think longer term as we look to the spring, yes, I think we could see rates moving down to new lows and possibly below 3%,” he said. “It’s certainly possible.”

The bond-buying will take the form of $500 billion in Treasury bills and $200 billion of agency-backed mortgage securities, Fed Chairman Jerome Powell said on a conference call with reporters on Sunday night.

The Fed’s MBS purchases started Monday with $5.1 billion of 30-year uniform MBS, backed by Fannie Mae and Freddie Mac, along with $2.5 billion of 30-year Ginnie Mae bonds, which include loans backed by the Veterans Administration and the Federal Housing Administration, according to New York Fed data.

On Tuesday, the Fed bought $1.1 billion of bonds containing 15-year fixed-rate mortgages backed by Fannie Mae and Freddie Mac, as well as $2.5 billion of 30-year Ginnie Mae mortgages.

On Wednesday, the central bank purchased $5.1 billion of 30-year Fannie Mae and Freddie Mac mortgages, and $1.1 billion of MBS containing 15-year mortgages backed by the two government-sponsored enterprises, or GSEs.

On Thursday, the biggest day of purchases so far, the Fed bought $15.3 billion of 30-year mortgages backed by Fannie Mae and Freddie Mac. On Friday the Fed said it plans to buy $2.5 billion of 30-year Ginnie Mae bonds.

For next week, on Monday the Fed plans to buy $5.1 billion of 30-year Fannie Mae and Freddie Mac securities, as well $2.5 billion in 30-year Ginnie Mae bonds. On Tuesday, it plans to buy $5.1 billion in 30-year Fannie Mae and Freddie Mac MBS as well as $2.5 billion in Ginnie Mae securities.

On Wednesday, it’s planning to purchase $5.1 billion of 30-year Fannie Mae and Freddie Mac bonds, as well as $1.1 billion of 15-year bonds also backed by the two GSEs.

For Thursday, the Fed said it plans to buy $2.5 billion of 30-year Ginnie Mae bonds and $1.1 billion of 15-year mortgages backed by Fannie Mae and Freddie Mac.

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