COVID-19 Highlights the Need for Servicer Access to a Government-Backed Liquidity Facility
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- Article
- Abstract
- WHAT CAN CAUSE LIQUIDITY STRESS FOR MORTGAGE SERVICERS?
- DIFFERENCES BETWEEN GINNIE MAE’S AND THE GSES’ ROLE IN THE MORTGAGE MARKET
- THE GINNIE MAE MARKET IS AT MUCH GREATER RISK THAN THE GSE MARKET
- GSE AND GINNIE MAE ACTIONS TO ADDRESS SERVICER LIQUIDITY NEEDS DURING COVID-19
- CAN FHA, VA, AND RHS COVER ADVANCES FOR SERVICERS OF GOVERNMENT LOANS?
- BORROWING AGAINST SERVICING RIGHTS IS CONSTRAINED IN A CRISIS; BORROWING AGAINST GINNIE MAE SERVICING RIGHTS IS EVEN MORE DIFFICULT
- THE LACK OF A STABLE SOURCE OF SERVICER LIQUIDITY CAN GENERATE SYSTEMIC RISK
- GIVEN THESE CONSTRAINTS, HOW CAN WE ENSURE SERVICER LIQUIDITY DURING COVID-19 AND BEYOND?
- SHORT-TERM SOLUTION: A FEDERAL RESERVE COVID-19 LIQUIDITY FACILITY
- LONG-TERM SOLUTION: NON-BANK MEMBERSHIP IN THE FEDERAL HOME LOAN BANK SYSTEM
- CONCLUSION
- ADDITIONAL READING
- REFERENCES
- Info & Metrics
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