Secondary

The history of riskier lending over the last half century can offer lessons for today's market.

Many originators stopped making riskier products, including jumbo loans and low credit score offerings, during April.

The government-sponsored enterprises have set new temporary limits on mortgage sales while extending processing flexibilities related to COVID-19.

But it is still looking to conserve capital to cover future delinquencies and will likely halt dividends to the parent company.

Goldman Sachs and Morgan Stanley are backing the first commercial mortgage-backed securities activity in two months, through two deals that exclude hotel or department store retail assets that are most exposed to pandemic-related stresses.

The other parts of the Day 1 Certainty program regarding income and asset verifications remain in effect.

Some benefits are materializing from Fannie Mae's pledge to limit servicers' exposure to principal-and-interest advances the way Freddie Mac does, but counterparties of both GSEs remain exposed to other concerns.

But Black Knight and Arch Capital's mortgage insurance business aren't as affected, at least so far.

Guild Mortgage's presence in Washington state, the epicenter of the first U.S. outbreak, gave it an early glimpse of the obstacles ahead.

The total coronavirus-related mortgages in forbearance grew by 55 basis points, in lockstep with rising unemployment claims, according to the Mortgage Bankers Association.