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Thu Aug 20, 2020, 02:47 PM

Banks start to buy home loans at below-market prices - Bloomberg

https://seekingalpha.com/news/3607489-banks-start-to-buy-home-loans-below-market-prices-bloomberg?utm_medium=email&utm_source=seeking_alpha&mail_subject=usb-banks-start-to-buy-home-loans-at-below-market-prices-bloomberg&utm_campaign=rta-stock-news&utm_content=link-3

The halt on foreclosures of homes financed by government-backed mortgages implemented in March has an unintended consequence.

It's allowing banks and other lenders to buy mortgages out of bonds for less than their current market value, and, in the process, burn investors, Bloomberg reports.

Wells Fargo (WFC -1.6%) and U.S. Bancorp (USB -1.3%) have started buying, leading bond holders to eat the losses.

At the center of the transactions is Ginnie Mae, a government-owned corporation that guarantees the payment of principal and interest on bonds containing mortgages insured by the Federal Housing Administration, Department of Veterans Affairs, and other government agencies.

Under Ginnie rules, banks and other lenders can buy loans out of mortgage...snip

In light of this snip from: https://www.barrons.com/articles/federal-reserve-tells-big-banks-how-much-a-capital-buffer-they-must-have-51597080906:

Big Banks Are Told How Much a Capital Buffer They Must Have. What It Means for Investors.

"The banks have until Oct. 1 to meet the requirement if they have not already done so. The Fed says it supports banks using their capital buffers to lend to businesses and households in a “safe and sound manner.” More at link.

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Reply Banks start to buy home loans at below-market prices - Bloomberg (Original post)
Backseat Driver Aug 20 OP
brush Aug 20 #1
Wellstone ruled Aug 20 #2
brush Aug 20 #3
Wellstone ruled Aug 20 #4
Name removed Sep 4 #5

Response to Backseat Driver (Original post)

Thu Aug 20, 2020, 03:22 PM

1. Any idea what this means for home prices?

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Response to brush (Reply #1)

Thu Aug 20, 2020, 03:28 PM

2. We will be okay until

November 15th,then 2007 all over again. Watch and see.

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Response to Wellstone ruled (Reply #2)

Thu Aug 20, 2020, 03:35 PM

3. Why Nov. 15?

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Response to brush (Reply #3)

Thu Aug 20, 2020, 04:15 PM

4. Only four plus weeks left in

2020 Business Year. Stories about Wells and other Mortgage Bond Holders are Harvesting Mortgages out of those Bonds and paying below market prices for those houses to which the Mortgages are assigned.

This whole house of Cards might collapse even sooner if zero Covid Funding is either short shifted or some really POS is agreed upon. I am here in Vegas,our market is buoyed by Cash Buyers from Cali whom are just now receiving their Insurance Settlements from last years Fires.

Our Real Estate Friend in Southern Utah says in his market the same story. And he has run out of Inventory completely. As he said two weeks ago,I have seen this before and I am Banking every dime I make. And he referred to the 2009 bust in his area which actually started in 2006,here we go again,once the Checks stop coming,we go South big time.

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