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By year end, over half of Government-Sponsored Enterprise “GSE” (conventional) forbearance plans and approximately 70% of Ginnie Mae forbearance plans are estimated to expire. Conventional buyouts have been minimal thus far, but an updated Flex Modification option could lead to future GSE buyouts. Buyout risk for Ginnie-backed mortgages remains greater
2020 was a year of challenges in many aspects of life, business, and the economy. The start of 2021 brought a close to a tumultuous year and opened the door to a year of economic recovery and a hope for more normal times. In March 2020, the banking industry was
The narrative for the US economy has shifted as we move into the second half of this year. Not long ago, financial markets were saturated with talk about inflation and rising interest rates, but after an initial surge from economic reopening and rebooting, the bond market is now telegraphing expectations
At the onset of the COVID-19 pandemic in the United States, strict shutdowns and stay-at-home orders created concern for the economy and municipal finances. Forecasts for tax revenue were bleak with anticipated double-digit declines, and many state and local governments braced for a serious financial blow by adjusting budgets, cutting
As the US economy continues to work its way out of the recession brought on by the Covid-19 pandemic, many economists debate what the future will hold. With inflation, asset bubbles, rising rates, and the effect of fiscal spending being hot topics during board and ALCO discussions, the question becomes
The Fear There is growing concern that the trillions of dollars of stimulus created by governments and central banks to fight the economic fallout of the coronavirus will explode through the economy and cause a surge in inflation in the second half of 2021. Sustained upward price pressures would cause
Interest rates go up, prices go down. Ask any fixed income portfolio manager in the world what the first rule of investing in bonds is and you’ll hear the phrase above or something similar. And while the notion that bond prices decline as interest rates increase is not a matter
Before the COVID-19 pandemic took hold on the world and the United States, many community bankers watched the slow fall of their on-balance sheet liquidity. Throughout the last decade of economic expansion, many community banks’ loan demand consistently outpaced deposit growth. At the beginning of 2020, bankers’ expectations for the
A wave of forbearance expirations expected this spring has investors anxiously awaiting clarity on what it will mean for the mortgage market. COVID-19 forbearance plans introduced by the CARES Act last year make it possible for any borrower with a mortgage backed by Fannie/Freddie/Ginnie to stop paying their loan for
“The potential impact of the COVID-19 pandemic on the City cannot be quantified at this time, but the continued outbreak of COVID-19 could have an adverse effect on the City’s operations and financial condition.” This disclosure, or something like it, is now regularly included in documentation by municipal issuers. While
How We Got Here In 2009, some said interest rates had nowhere to go but up. Well, Treasury yields found a way to continue to go down and stay down. The Fed took seven years to increase the funds rate by a quarter point at the end of 2015, then
Over the past few years, the municipal securities market has experienced a growing number of municipal issuers that have met their borrowing needs by going directly to investors to access capital. This practice is commonly referred to as a “private placement.” There are many reasons why an issuer may elect
Over the past few years, the municipal securities market has experienced a growing number of municipal issuers that have met their borrowing needs by going directly to investors to access capital. This practice is commonly referred to as a “private placement.” There are many reasons why an issuer may elect
By Dale Sheller and Matt Harris As summer winds down, the same goes for the Payroll Protection Program (PPP) as August 8 was the final day for application. This critical but controversial component of the $2 trillion CARES ACT passed in March this year created over $525 billion in loans
With all the distractions and distracting challenges faced this year by the nation’s community bankers, it’s easy to understand how some may have lost track of an approaching deadline that could have significant consequences for their institutions and their customers. Unless something changes, and the authorities have been pretty clear
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