Mortgage Companies Cash in on Pandemic Relief
The nation’s billionaires are catching plenty of grief for profiting from the pandemic. All they are guilty of is providing services people wish to pay for. Nothing wrong with that. Then there are the mortgage companies. It turns out they are turning a good profit off Uncle Sam’s forced forbearance plan.
Ben Eisen writes for the Wall Street Journal, “Mortgage companies have ramped up their purchases of government-backed mortgages in forbearance, and they are selling these loans back to investors at a profit.”
In a bit of pandemic crony capitalism, mortgages made through the FHA (Federal Housing Administration) or the VA (Department of Veterans Affairs) are pooled together into Ginnie Mae bonds. If a borrower stops making payments, Ginnie Mae allows the mortgage servicer to buy the mortgage
Article from Mises Wire