Ginnie Mae revealed some details Friday of a promised program aimed at assisting issuers having trouble with their obligations due to the pandemic.
"This is an extraordinary and last resort option for issuers in these unprecedented times, that will enable them to continue to serve homeowners and renters in America who rely on the government mortgage programs financed by Ginnie Mae," Seth Appleton, Ginnie Mae principal executive vice president, said in the press release.
"As important, this program underscores Ginnie Mae's commitment to ensure timely payment of scheduled principal and interest to investors."
Issuers that need assistance with remittances due April 20 will need to apply by noon in the Eastern time zone on Monday.
In a rare show of unity, banking industry and consumer advocacy groups told congressional leaders that it is not too late to ensure individuals can access all of their coronavirus relief funds promised by the government.
The Internal Revenue Service and the Treasury Department provided cross-border tax guidance Tuesday to provide relief to individuals and businesses affected by travel disruptions arising from the novel coronavirus pandemic.
"One of the advantages is that we can hear from shareholders in faraway places," John Dugan said at Tuesday's annual meeting, which was held entirely online as most of the country remains on lockdown to help stop the spread of the coronavirus.
As anticipated, Ginnie will offer relief through a new version of the Pass-Through Assistance Program it uses to support issuers during natural disasters. An unspecified fixed rate of interest will apply to a given month’s pass-through assistance to all issuers.
Smaller mortgage lenders were heartened by the initial details released about the program.
"The Community Home Lenders Association commends Ginnie Mae for its continued progress in putting in place its PTAP advance program, to provide a liquidity backstop to deal with the significant increase in advance demands resulting from COVID-19 and the new federal forbearance option," Scott Olson, executive director of the Community Home Lenders Association, said in a press release.
"We are particularly appreciative that there will be a fixed, uniform interest rate, so smaller lenders will be treated equally, as well the treatment in which servicers can participate without being held in default."
Ginnie plans to post the rate for financing obtained under the program online on the second business day of each month and can still declare issuers in default if they don't fulfill other responsibilities under their contracts.
