Mortgage Bankers Association President and CEO Robert Broeksmit on Tuesday reiterated his call for a broad coronavirus-related liquidity facility akin to Ginnie Mae’s, which could assist the industry at large.
“We continue to push for a similar facility for the whole market, including Fannie and Freddie servicers,” he said during the MBA’s virtual event. “We helped lay the groundwork for one in the stimulus bill that passed congress in late March, since then we’ve been in constant conversation with FHFA, Treasury and the Federal Reserve. We’ve told them that without their intervention, the economic consequences could be severe.”
Federal officials are unlikely to provide a last-resort liquidity facility exactly like Ginnie Mae’s to the GSEs because of differences between the two entities and the markets that they serve.
However, the general idea could be adapted to meet the needs of mortgage companies that work with Fannie Mae and Freddie Mac. Mortgage companies in the private market have been looking for more sources of liquidity as well.
Among the avenues the MBA is exploring to this end is a proposal in the Health and Economic Recovery Omnibus Emergency Solutions Act, which would direct the Federal Reserve credit facility authority enacted under March bill to be utilized, as needed, by mortgage servicers and residential rental property owners. While the Republican-controlled Senate is considered unlikely to approve the HEROES Act recently passed by the Democrat-controlled House, some aspects of it could receive bipartisan support and move forward.
Broeksmit acknowledged that Federal Housing Finance Agency Director Mark Calabria and other federal officials have not been quick to offer a liquidity facility to the GSE market. But he noted that the FHFA has taken several other steps to address challenges mortgage companies are facing due to the need to temporarily suspend payments on government-related loans under the terms of the March bill.
Source: nationalmortgagenews
