MBS Highway’s Barry Habib on the coronavirus mortgage meltdown

The Housing News Podcast is a weekly wrap of the top news stories by HousingWire CEO Clayton Collins.

Each week, HousingWire interviews financial services experts who can help make sense of the latest headlines sponsored by our partners at Arch MI and Quicken Loans Mortgage Services.

This week, MBS Highway Founder and CEO Barry Habib, who was recently named the 2020 winner of the Crystal Ball Award, presented by Zillow and Pulsenomics, joins the Housing News Podcast for its fifth episode of season three.

In the first half of this two-show episode, Habib discusses the coronavirus’ impact on the U.S. housing market and explains how a global pandemic hurled the housing finance industry into an economic storm that has yet to pass.

Habib, who says “not even Stephen King could have scripted this,” also explains why the Federal Reserve’s desire to lower mortgage rates isn’t just damaging for mortgage servicers, but lenders who now fear losing the ability to hedge their risk.

According to Habib, not only does the Federal Reserve need to temporarily slow MBS purchases to allow pipelines to clear, but they must more clearly communicate that mortgage rates and the Fed Funds Rate are not one and the same.

Here’s more detail on the topics of discussion this week:

In a HousingWire PULSE article, industry titan David Stevens says Washington must act to avoid a mortgage market disaster. According to Stevens, Congress’ recent legislation to aid Americans who have been hit from the coronavirus will turn into a tsunami for housing, and the administration seems to be betting that only a few mortgage companies will be swept away.

Last week, 15 financial industry trade associations and affordable housing advocate groups issued a joint statement calling on the Federal Housing Finance Agency, the Federal Reserve and the Department of the Treasury to establish a liquidity facility for servicers as a follow up to the mortgage forbearance provided by the CARES Act. Under the CARES Act, signed into law on March 27, homeowners with federally backed mortgages are provided with a foreclosure moratorium of at least 60 days starting on March 18, and the ability to get mortgage forbearance for up to 12 months.

Late last week, PennyMac, which grew last year into the largest mortgage aggregator in the country, told its correspondent originators that it will not buy any loan that is currently in forbearance. Additionally, the aggregator said it may force originators to buy back a loan that goes into forbearance within 15 days of PennyMac buying it.

And here are links to the topics discussed:

1) [PULSE] Forbearance 2020: Standing on the precipice
https://www.housingwire.com/articles/pulse-forbearance-2020-standing-on-the-precipice/

2) Broad coalition of mortgage industry and housing associations call for liquidity facility for servicers
https://www.housingwire.com/articles/broad-coalition-of-mortgage-industry-and-housing-associations-call-for-liquidity-facility-for-servicers/

3) PennyMac warns mortgage originators that forbearance buybacks could be coming
https://www.housingwire.com/articles/pennymac-warns-mortgage-originators-that-forbearance-buybacks-could-be-coming/

Advertiser Disclaimer: Quicken Loans Mortgage Services (QLMS) – Call for cost information and conditions. Equal housing lender. Licensed in all 50 states. NMLSConsumerAccess.org #3030.

Housing News

Hosted by HousingWire Editors, the HW Weekly Newscast is a conversational look at the most important stories coming across HousingWire's news desk.

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