March 27 (Reuters) – A top U.S. housing regulator is planning on providing assistance to mortgage servicers bracing for a wave of missed mortgage payments as the coronavirus puts homeowners out of work.
Ginnie Mae, the government-owned issuer of mortgage-backed securities, wrote in a blog post here on Friday it will pay bondholders in those mortgages, easing liquidity concerns for servicers which typically face off against homeowners, passing their payments on to bondholders.
The COVID-19 respiratory illness caused by the virus has killed over a thousand people in the United States and infected more than 85,000. Efforts by states to arrest the spread of the virus by shutting down businesses and keeping people at home have put millions out of jobs, leading the federal government to impose holidays on a range of debt repayments, including mortgages.
As part of its plan to prepare for a slew of missed payments as borrowers brace for the impact of the health crisis, Ginnie Mae said it would handle the current situation as it would any natural calamities like hurricanes or floods.
An entity of the U.S. Department of Housing and Urban Development, Ginnie Mae creates mortgage bonds by pooling loans mainly from the Federal Housing Administration and Veterans Administration. (Reporting by Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila)