Thank and you, Hugh good morning, everyone.
situation, spending driven workers. economy, then to of have and in furloughed off we'll Given we many start highlights change changing And habits Covid-XX Covid-XX and our our review financial avoid a lay this has outlook discussing pandemic results off business. dramatic of on quarter. impact businesses have describing current the I'll while the by people the our to our business quarter. or the economic our approach as behaviors changed sudden The exposure, and their are
rebound is scenarios, it QX our scenario a growth. expect by followed considering approximately approximately second of GDP fall in X.X%, severe Despite decline full XXXX in most year, the is forecasted many more XXXX the X% the which half the After that in decline economists GDP X% quarter. second back of the annualized bounce of XX% year annualized to to believe plausible and one around of we a
with the quarter expect in X%. to before peak close unemployment second XX% around to XXXX XX% ending We XXXX the of the average rate of
These the forecasts estimates economic severity is distancing of June, restart social on that mandated our our the are shutdowns duration pandemic. uncertainty based the and in to eased. given will are the inherent and measures in There uncertainty around activity begin assumption
XX% And to the For GDP unemployment average one-month a and QX economic in be in X% delay year, for in pickup X% XX% for the the quarter. decline for rate activity closer to a to result could while example, second to could a annualized XX%.
first to Amid the the of in more quarter lows, uncertainty the refinance record mortgage capacity large of lender slowly rates due rates followed reaching in primarily face plunged treasury Covid-XX, widening volumes. spreads constraints with
to XXX below year. expect points treasury through rates near levels to basis of the stay the current mortgage end low stay rates and We
history. the exposure. the in their decline of our now XX.X Turning March, a more home sales beginning people housing to fell quarter market sentiment survey's Well second by HPSI, housing, the shift decline the as index in XX% or was in strong than purchase points largest position single in the total month proprietary avoid to home we in expect to year, behavior the
As hold off surrounding also economy, home expect construction the virus light of effects the decline. homes of to we purchasing people uncertainties in and the the
We the fall with expect single-family housing second by housing declining starts quarter in nearly to starts sharply full-year X%.
estimate a refinance At rate of single-family have have decreased purchase the home lower of environment. increased As a to we XXXX origination due lower time, sales originations. our forecast, same result we a forecast
in boost origination to drive XXXX. XX% a nearly XXXX expect refinance in total We by volume up versus
XXXX will was slowdown in believe And the price be we our we the flat, year. decrease a housing home economic believe in our declines from implies forecast rest Given because the relatively over quarter, positive for in in estimate of first prices activity, our the prior home outlook X% growth. of significant growth
expect or On and rise rent possibly we the growth. vacancy multifamily negative side, while modest lower a
perform We better assets. believe multifamily assets estate commercial generally other than real will
by tenants and local well expect as stay municipalities, Act the we cases by to moratoriums employment environment eviction uncertain the most Given imposed CARES in in some as place.
our help manage Covid-XX we the providing to related forbearance with said, and single-family hardships. of in borrowers pandemic multifamily taking helping committed borrowers Hugh impact action to the including are As to Americans
the portfolio, our our liquidity position and I'd like to time implications capital. to retain financials affects take about talk to and how conservatorship forbearance some
accounting for guidance. of provided include restructurings First, our the financials TDRs projections debt the by inter-agency relief CARES troubled the banking Act and or benefit and recent
approximately our While have forbearance far. that we in X% estimate of so single-family taken loans book
of higher are be the economic could worse uptick in reflects quarter allowance uptick XX%; forecast. if Our than our conditions
a coming are into a current XX%. of estimate projected change over I opted preliminary reflects have and months. to new forbearance only numbers number a properties higher that agreement as and side evaluate are the multifamily the thus uptick caveat to data much allowance On like forbearance likely our though of the small we
When principal payment P&I a P&I for may temporarily their incurring loan enters single-family the without majority and borrower the the making interest payments misses a or penalties, stop forbearance, borrower when of will we investors, our loans payment now payments investors for that the MBS to the approach to first months, MBS four advance across is months. consistent GSEs. four advance the servicers After an
addition, will forbearance. they servicers exits a payments made reimburse for have In we when loan
need buyout. the loan outcomes borrower For need none options the to servicer the repayment single-family for is ends. to once If modified the period will these loan payments. In to able reduce then loans, or these In loan up loan MBS the allow the of buy mortgage payment. cases Trust, default. is work, is begin mortgage the borrower forbearance modified If set may loan not we Trust. loan the these there impacted likely beneficial we options again, to not cases defaults, in from the to paying several this liquidity either their the a end initially If from work or borrowers' as defer the the maintain perspective which the the plan MBS a the stays monthly where do will borrower us out of or do is are then
entering which the a we in lifetime to how developed of a explain CECL, financials based estimated expense. credit first allowance. in and quarter, in related more our set moments, reasonable in aside Covid-XX are we the Loans largest was first reserves on impact, forbearance we for supportable to which losses few the I’ll effect expected impact detail In implemented on several approach. immediate quarter, the we saw credit ways, the required Under
explain like net affects I’d to first But capital. portfolio, our liquidity how position interest income, our forbearance and retained
negative guidance of the to banking accrue loans for may First, response interest impacts and our with Covid-XX, to our interest number on income income. would can to effect issued modify reduce we to net interest policy in forbearance, typically interagency income. In which months non-accrual which increase of accordance we on elect policy the recently
means accrued able that assess important in we collectibility. our what may allowance quarter. we it’s note interest the However, recognize to to need interest to to that second we would book also to for be the may receivables This an income; continue receivable against need
potentially we're interest will MBS because issuing which our loans expense further investors, finance to to income. P&I additional payments reduces In we and purchase debt interest out to incur trust, of addition, net
loss to whole loans the We support portfolio. use our lenders impact At to buying from market and billion previous to balance end below FHFA retained to the quarter, $XXX portfolio provide billion. our Second, medium-sized the through mitigation first $XXX fell current to and activities. a the liquidity the from retained of quarter, limit billion portfolio our retained primarily the mortgage of $XXX small well
the we retained a a increasing. portfolio balance result in see emerging couple to of trends Covid-XX, due that However, impact of may
provider. important our have loan First, pulled the to market as market, increased and back volume other has caused grow. liquidity we more we from seek conduit provide become to whole participants have even This an liquidity
Second, Trust, to future periods mitigation portfolio loans purchased loss if defaulted need or of in modified likely is to be some our MBS out grow.
and to current of increase whole may our to loans needing loan and The portfolio to request be trust of routine in out potential our Treasury's size need that our of limits. debt consent conduit volume result could and FHFA purchased the
lenders of fund activity, end me the $XX The investments P&I buyout been billion $XXX expected up The loan touch to purchasing MBS quarter, from the December needs portfolio. let liquidity. other to in at whole have increases our increasing conduit first on in advances climbed balance we billion XXXX. Third, of and
of impacts capital. on the conservatorship address me let Fourth, Covid
may enterprise this It later quarter. capital expect a under to of to be crisis. -under the likely rule. applies described longer the some That that current substantial new FHFA requirements Covid-XX us, conservatorship the that the capital result said, of the is substantially I possible will apply re-propose no a capital continue currently under rule is the increase or impacts our to that as We
significantly carry loans under non-performing and capital rate as framework. will higher the conservatorship miss have capital higher a forbearance and even one charge; a Loans flagged are that payment capital
As an single-family payment trials, on complete times over one five and re-performing. they are loan. example, forbearance considered by missed credit risk exit increases capital even with When loans modification a
for loans, substantial of than re-performing they our While a non-performing are single-family still credit risk capital for charges extended in loans time. period for could capital lower increase an modified requirements drive
a Additionally, X.XX% non-performing and market re-performing risk will charge. loans additional trust we buyout incur of
the us the modeled near current the have Transfer The is capital what our which transfer on acquire. conservatorship loans in economic to and period, our If benefits transactions that financials term, for CRT affecting consistent future to item and Credit our CRT; with Another position. uncertainty is turbulence recent will we our limit Risk programs enable continue of ability some to risk testing. we extended capital it conditions limits new stress in an issue
requirements current will If the our capital home in prices increase the decline, cyclicality to framework. due pro capital
capital X% capital model or in home price framework basis are conservatorship affect to QX, in $X.X conservator billion in phase change Although would home price XXXX. equates by prices to QX, for five FHFA's quarters, change capital the capital lagged point changes or increase requirements. decrease two home our XXXX thus consume A
forbearance ends. now we on allowance turn outcomes We analysis, impact a the of estimate in we with the assumptions once gleaned to considered quarter. the in large-scale Covid-XX forbearance information employment period associated layered periods, how XXXX the I'll historical as lockdown the To first risks forbearance, then and from losses state hurricanes. possible in estimated use such
forbearance, and the analysis, our will which we on previously. XX% are and books mentioned percentage single-family I Based expect respectively, of loans this we in XX% multifamily that as estimated enter
the single-family loans entering the loans estimated of we Cares the percentage relief or Our would modify Act. TDR for the counting the provided estimate reflects self-cure foreclosure. forbearance, Of in enter of that adoption also
over months For of months. missed that multifamily would loans XX need the payments be would up that entering to period, borrowers majority not forbearance, begin we paying make modified. three estimated vast expected next be the the loans to and after would forbearance Borrowers
for For the in forbearance, our reduction an home the previously. the billion, of well of pandemic forecast that which of drove expected for Covid-XX price the allowance I mentioned $X.X increase the first effects as as XXXX quarter, accounts impacts
more turns our of expect, than than loans allowance estimated, increase. increase also adverse out of or would it are we enter outcomes expectation that of the more loans as forbearance the we end of If the our this forbearance credit would losses if
In addition, worst expectations value allowance. home price property increase or multifamily would the
management. taken conservatorship, shape far it during of Because is time, financial and book in the risk actions credit better of have our strengthen Since we company - economy the underwriting the than have at was the crisis. the that beginning improved we to our
stronger As much a our result, book a profile. has credit
For the for average weighted with single-family compared book mark-to-market XXXX XXXX. the XX% in of loan-to-value at end the XX% instance, ratio was
The ratio percentage XX% which XXX% the of to has the net default is at the loans book greatest risk from underscores that decreased above end XXXX, our has decreased. at XXXX represents loan-to-value mark-to-market loans of the on of with proportion substantially of X.X% end
X%, credit and one-third one may Further, approximately loans of the service that where underwriting pay. to time, would reducing us. impact debts provides thereby that even borrowers granting or an lender program, continue below the debt only program, better our share or our XXXX, book multifamily the debt DSCR, approximately of the would hypothetically the service net had X of book double income the of that on end multifamily, requirements. net an average, share meaning coverage income operating on of the multifamily at book average properties operating cases partners For to the from by XX% decreased ratio, losses in increase service If time default, coverage X% would to assurance will approximately was delegated
credit now our a book our improved of result profile. has of stronger business underwriting, a As
well having we mitigation with agreement in stock to purchase the against loss preferred capital of programs, $XXX.X remaining Treasury. In at end under stronger billion the of the $XX.X withstand losses, cushion have a book billion to QX to crisis, established and potential addition senior funding
Now, the account pretax I'd increase of rate fourth to $X.X credit investment fourth the switch first. income quarter like a in the for losses, brief. associated drove partially a income million, to $X.X quarter In from billion offsetting earned the the to losses credit largely Covid-XX interest earned the financials as earnings million expense to down to aforementioned quarter $XXX a reduction quarter beneficial million In in turn the related total, in quarter reduction to to related fourth from expected we due the from related impacts. Also income the contributing which first. expense credit quarter-over-quarter of comprehensive we, first to switch $X.X reflects as well shift was allowance gains the in in in and
had in fair investment in gains value the to were mainly held decrease single-family due of sales. due loan re-performing first losses to the In our quarter primarily sale. a the quarter, loans we fourth for Investment
one-time result a with to the the earnings of our a amount retained billion this $X.X of As our quarter. implementation left associated of charge CECL earnings
$XX.X the from in quarter Our net fourth. $XX.X the the billion to of at first worth fell billion end
the drove to the is Turning single down first by quarter, million in fourth, of $X.X segment the driven income results. $XX primarily family overall which same business, factors net the that in our the earned from million
by which billion a business, related quarter adjustments, rate the credit impact billion pretax partially the impact. interest expense from driving For the beneficial $X.X the rate, first Covid-XX a switched $X.X in reflects change quarter to income single-family charge offset fourth in related
quarter. refinance mortgage was market to by the partially the offset in due quarter the the billion fourth increased Overall, to purchase similar of volumes. XX% acquisitions in $X first those Our were by reduced of volumes billion to GSEs rates, declining compared mortgage loans securitized share single-family $XXX fourth. by in Single-family XX%
single-family grew $XX at XX of the billion points. serious average conventional business Our guarantee rate by quarter-over-quarter while delinquency book flat basis remained
pandemic. SDQ does Our not impact the yet rate reflect of the
in a our quarter by decreased the and in to expense roughly multifamily increased rate million associated remained book driven fourth by The Covid-XX basis slightly credit perspective. first substandard related primarily points year-over-year The fourth, end multifamily, For XX% the from quarter. X% the at credit of versus while delinquency average X.X%. the $XXX strong the the in million over and book historically impact net of serious $XXX was by up income with four low of quarter from at first rate the the the remained five quarter
and case As SDQ the our is rates reflect not impact the do the single-family, pandemic. of multifamily of yet substandard
quarter XXXX. Our under five share from billion to $XX volume through fourth. of the GSC in billion under cap end of XX% acquisition QX and was in the billion first quarter $XX capacity mortgage mortgage acquisitions origination, cap the bringing volume to increased Multifamily total volume our multifamily in the FHFA's the leaving $XX in XX%
quarter, at Covid-XX business. our from impacts Our billion capital on $XX start discussing capital down requirement our we expect was fourth. financials in I impact additional billion under FHFA again the on framework phase will quarter, conservatorship the be next will of see the $XX approximately in we to first and
by For on to judgment and next more loss have will points data as impact the as and our our is and we first economic well loan re-evaluate management we'll our regarding allowance. our consider quarter, forbearance outlook the assumptions quarter largely financials to based
I'll back Hugh. now turn over to it
