Rusty Shackelford

For some reason now I’m picturing Dwight Schrute trying to make a Citizen’s Arrest. Carry on

Ginnie Mae Plans Disaster Aid for Virus-Hit Mortgage Servicers (Bloomberg) -- A top U.S. regulator is working to provide a lifeline for mortgage servicers stressed by the coronavirus pandemic through programs meant to address natural disasters. To prepare for an expected wave of missed payments as borrowers deal with the economic fallout from the virus, Ginnie Mae is moving toward using relief programs normally implemented in the wake of hurricanes, floods and other calamities, according to a Friday blog post. The plan under discussion would help mortgage servicers, companies that perform the critical task of taking payments from borrowers and distributing them to bondholders and others. If big servicers were to collapse as payments dry up, federal regulators would have to find other companies to take over their business. “Ginnie Mae has the authority to make changes to the requirements of our program, and we are using those powers to tailor the existing disaster pass-through assistance programs to more suitably scale to the needs of this national emergency,” Principal Executive Vice President Seth Appleton said in the blog post. Ginnie Mae expects to implement the changes within the next two weeks, he said. President Donald Trump has signed legislation that will let borrowers experiencing virus-related financial difficulties delay mortgage payments for months. When such forbearances are granted, servicers are typically expected to advance the cash themselves. Liquidity Shortage Even if borrowers never resume loan payments, servicers eventually get reimbursed by federal programs that backstop the mortgage market. In the meantime, however, firms can face a severe liquidity shortage as they continue to advance payments. Since economists expect that the virus could temporarily push the unemployment rate as high as 25%, servicers are expecting a surge of missed payments. Ginnie Mae, which is part of the U.S. Department of Housing and Urban Development, backs bonds containing mortgages insured by the Federal Housing Administration, U.S. Department of Veterans Affairs and other agencies. The agency’s $2.137 trillion in bonds form one of the world’s largest mortgage-backed securities markets. The disaster-relief programs -- historically used for localized disasters rather than national epidemics -- let Ginnie Mae advance payments to mortgage bondholders at the request of a servicer. A key difference in the case of the current crisis is that payments made through the program will not be considered an event of default, Appleton said. The need for relief is especially acute among nonbank servicers, which don’t have deposits or other readily available sources of cash. After the 2008 financial crisis, banks pulled back from the programs that feed into Ginnie Mae, and nonbank firms now dominate that market. Mortgage-industry lobbyists unsuccessfully tried to get Congress to include some sort of liquidity facility for servicers in the stimulus legislation. Still, many servicers expect the Treasury Department and the Federal Reserve to create a lifeline for servicers out of other money in the $2 trillion package. Treasury Secretary Steven Mnuchin said Thursday that he has formed a task force to develop recommendations on whether and how to help servicers suffering from liquidity issues. The group will submit a report as soon as Monday, Mnuchin said. Any move that Ginnie makes would likely supplement rather than replace any lending facility created by Treasury and the Fed.

Y2.015 beans turned out great. Just soaked em 24 hours and cooked 50 minutes in the instantpot

10 Trillion EOY

I heard Plucker's has a hell of a lunch special going on.

https://mobile.twitter.com/Hipster_Trader/status/1242867217215209472

How were your beans stored? I'm going to try mine that have been stored indoors for 5 years in sealed mylar bags w/ oxygen absorbers inside 5 gallon home depot buckets w/lid. The bags claimed up to 20 years, but i'm sure that's only for certain foods and in a cooler dryer place than I have.

Saw this on bloomberg: Mortgage Bonds Rattle Wall Street Anew With Invesco Joining Pain Shahien Nasiripour Invesco Mortgage Capital says it can’t meet margin calls The $16 trillion U.S. mortgage market -- epicenter of the last global financial crisis -- is suddenly experiencing its worst turmoil in more than a decade, setting off alarms across the financial industry and prompting the Federal Reserve to intervene. Unlike last time, risky mortgages aren’t the cause. Instead, the coronavirus pandemic is threatening to make good loans go bad -- and simultaneously sapping the market’s funding. There are fears that government efforts to shore up borrowers and financing won’t be enough and that mortgage and property investors again face massive losses. Measures to slow the spread of the deadly disease are slamming the brakes on commerce, threatening to prevent companies from making payments on their leases and commercial mortgages. Companies are also firing employees, who won’t be able to keep up on their own rents and home loans. Mortgage industry veterans warn of a cascade of defaults. At the same time, holders of mortgage-backed securities are fielding redemption requests from clients, margin calls from jittery counterparties and drops in their valuations, forcing the funds to solicit offers on billions in assets in emergency sales over the weekend. The pain continued Tuesday with Invesco Mortgage Capital Inc., a real estate investment trust that invests in mortgage-backed securities, also saying it’s no longer able to fund margin calls. If forced sales accelerate, bond prices could fall and put pressure on other investors to mark down or sell their holdings too. The tensions are flaring up in myriad ways across the property market -- boosting interest rates for home loans last week, leading listing companies such as Zillow Group Inc. to suspend buying programs and prompting industry players from real estate brokers to mall owners to plead directly to President Donald Trump for relief. In one of the most dire warnings, real estate investor Tom Barrack said Monday that the U.S. commercial-mortgage market is on the brink of collapse and predicted a “domino effect” of consequences if banks and the government don’t take prompt action to keep borrowers from defaulting. “You have to support the employers” so they can keep paying their rents and employees, he said. “When commerce stops and they can’t pay rent and they can’t pay interest on the debt, and then the banks and the intermediaries can’t pay their investors, it all collapses.” Groups including the American Bankers Association, the Mortgage Bankers Association and the Housing Policy Council sent federal agencies a list of proposals aimed at homeowners affected by illness or quarantine that results in a loss of income. The groups asked the federal government for financing to cover missed payments. Negotiations between lawmakers and the Trump administration to prop up households and the economy with a roughly $2 trillion relief package keep stalling. Among the demands, Democrats are insisting on restrictions for corporate bailouts and stronger protections for workers. The Fed, in a surprise announcement early Monday, said it’s buying unlimited amounts of Treasury bonds and mortgage securities to keep borrowing costs low. It also set up programs to ensure more credit flows to businesses of all sizes and state and local governments. Read more: Fed sidesteps Congress’s bickering with sweeping rescue plan But that effort has limits. For example, the central bank is focusing on securities consisting of so-called agency home loans and commercial mortgages that were created with help from the federal government. There are about $10 trillion of U.S. mortgage-backed securities, of which about 14% don’t meet that criteria, according to the Securities Industry and Financial Markets Association. And when that tally of securities is compared to the Fed’s of about $16 trillion in total U.S. mortgages, the central bank’s announcement suggests that roughly half of all property loans will be eligible for purchase. Flagstar Bancorp, one of the nation’s biggest lenders to mortgage providers, said Friday it stopped funding most new home loans without government backing. Other so-called warehouse lenders are tightening terms of financing to mortgage providers, either raising costs or refusing to support certain types of home loans. One prominent mortgage funder, Angel Oak Mortgage Solutions, said Monday it’s even pausing all loan activity for two weeks. It blamed an “inability to appropriately evaluate credit risk.” Also retreating: A new generation of sophisticated home flippers, who use data and debt to buy and sell homes in quick order. Zillow said Monday it has stopped purchasing homes, following rivals SoftBank-backed Opendoor and Redfin Corp. “No one can say what a fair price is right now, so we’re not making any instant offers,” Redfin Chief Executive Officer Glenn Kelman said last week. Interest Rates Up Banks are facing pressures that will make it hard for them to step in by making or purchasing mortgages others are dumping. Corporate borrowers have been drawing down credit lines at banks, siphoning off cash and raising the prospect that the lenders will eventually incur losses. It all means households are being charged mortgage rates far above where they ought to be, with no end in sight, said Jeremy Sopko, co-founder and CEO of Nations Lending Corp. Even broker-dealers, whose job is to match buyers and sellers, are uncertain, “and they’re normally the guys who have their pencils sharpened the tightest,” he said. Interest rates on traditional 30-year fixed-rate mortgages typically follow yields on the 10-year Treasury note, a benchmark that helps determine the cost of borrowing throughout the U.S. economy. But this month the gap between the two is set to reach a record, according to monthly data compiled by Bloomberg dating to 1998, in a show of how tumult in markets impacts what the average American has to pay on a mortgage. For Wall Street, the moment that crystallized the extent of problems in mortgage markets came Sunday, when some firms rushed to raise cash by requesting offers for their bonds backed by home loans. Eager sellers included investor AlphaCentric Income Opportunities Fund and Annaly Capital Management Inc., a mortgage REIT. Such solicitations are known as “bids wanted in competition,” or BWIC. “I ran dealer desks for over 20 years,” said Eric Rosen, who oversaw credit trading at JPMorgan Chase & Co., ticking off the collapse of Long-Term Capital Management, the bursting of the dot-com bubble some 20 years ago, and the 2008 global financial crisis. “And I never recall a BWIC on a weekend.” Then on Monday, mortgage fund AG Mortgage Investment Trust Inc. said it failed to meet some margin calls on Friday and doesn’t expect to be able to meet future margin calls with its current financing. And TPG RE Finance Trust Inc., which focuses on commercial real estate debt, said it’s starting talks with lenders because of uncertainty about meeting future margin calls. “The Fed is going to do whatever it takes to restore normal functioning in the market,” said Karen Dynan, a Harvard University economics professor who formerly worked as a Fed economist and senior official at the Treasury Department. “But we need to remember that the root of the problem is that financial institutions and investors are desperately seeking cash, so in that sense the Fed’s announcement is not everything that needs to be done.”

https://mobile.twitter.com/NateGeraci/status/1242606783182635009

I can’t pull up the chart rn, but the 10 year bonds went lower from open to close (yields went up) while MBS also went up. Fed stepping in the purchase MBS obviously is detaching mortgage rates from fundamentals.

Great stuff, thanks for the knowledge. Do you think the 10 yr had anything to do with it, since it went the other way from MBS?

@UTPhil2006 would you give some insight on what mortgage rates did today?

So it looks like MBS are up while 10 yr bonds are down (usually move in tandem) It will be interesting to see which one wins out on the effect to mortgage rates today.

Why is it that the only graphs we see now are Cumulative Cases (y axis)? The original Flatten The Curve graphs were all # of Daily Cases (y axis). I'm sure they're not trying to deceive anyone... well anyway, does anyone have a link to an updated graph that is not cumulative?

My play money high risk, short term holding is: EDZ triple bearish emerging markets ETF

Last night on 60 Minutes: Scott Pelley: Is the Fed just going to print money? Neel Kashkari: That's literally what Congress has told us to do. That's the authority that they've given us, to print money and provide liquidity into the financial system. And that's how we do it. We create it electronically. And then we can also print it with the Treasury Department, print it so that you can get money outta your ATM.

https://www.bloomberg.com/news/articles/2019-09-22/repo-market-s-liquidity-crisis-has-been-a-decade-in-the-making

"member 2.5 years ago when Janet Yellen was Fed Chair and told us another financial crisis the likes of the one that exploded in 2008 was not likely “in our lifetime.”

Serious answer: use those strong USD's to buy physical gold

That's an SEC rule, but meanwhile get TF out of robinhood.

LMAO for real

So, #mintthecoin anyone?

possibility: everyone in every developed nation will be made completely reliant on the government for income/sustenance