Ginnie Mae issuers repurchased $15.5 billion of delinquent government-guaranteed mortgages out of MBS pools in the first quarter — a significant decline from the prior period. In 4Q buybacks approached a staggering $57.6 billion.
In 1Q 2009 repurchases came in at almost $5 billion. GNMA issuers can repurchase residential loans out of securities when they become 90 days or more past due.
Issuers are required to advance interest and principal payments to investors which make it expensive to leave delinquent Federal Housing Administration (FHA), Veterans Affairs (VA), and Rural Housing Service guaranteed mortgages in GNMA pools.
Ginnie president Ted Tozer attributed the fourth quarter surge to issuers cleaning house. He also noted that servicers allowed delinquent loans to pile up last year while they focused on implementing new loan modification programs.
