Financial Services Industry and Affordable Housing Advocates Call on Financial Regulators to Establish a Liquidity Facility
April 4, 2020
A broad coalition of organizations representing financial industry and affordable housing advocates, today released a statement calling on government regulators to provide a source of liquidity to those mortgage servicers that may need additional capacity to support homeowners and renters impacted by COVID-19.
“Congress recently enacted the CARES Act to provide relief to families impacted by the global health pandemic caused by the COVID-19 virus. In addition to providing support for unemployed workers and small businesses, Congress codified forbearance actions closely aligned with those announced by the Federal Housing Finance Agency (FHFA) and taken by Fannie Mae and Freddie Mac in March to ensure that both homeowners and renters can maintain a roof over their heads during the crisis."
Policymakers rightly chose to respond, but made mortgage servicers responsible for delivering these government-mandated benefits, and the industry is prepared to supply that relief. The established forbearance framework is appropriate, as it gets help to the most people as quickly as possible. But the scale of this forbearance program could not have been foreseen by mortgage servicers, or fully anticipated by regulators.
It is therefore incumbent upon the government to provide the final piece of the puzzle – a liquidity facility for single family and multifamily servicers – to ensure that the entire industry can deliver much-needed economic relief to consumers through this unprecedented forbearance plan. While some servicers will not need assistance, many others will require temporary support to deliver forbearance at the scale and for the duration required."
The coalition strongly urges the Treasury Department, the Federal Reserve, and FHFA to establish a strong, reliable source of liquidity for mortgage forbearance – and to do so quickly.