The coronavirus economic assistance package is signed, sealed and delivered but concerns remain over the ability of nonbanks to pay MBS holders in the event delinquencies spike over the short term.
The mortgage market remained unsettled as the coronavirus damaged the U.S. economy and lenders weighed their options. The Fed came to the rescue with liquidity measures but fears regarding nonbanks persist.
Mortgage guarantors and regulators are keenly aware of the financial disaster that could be in the making. Conference of State Bank Supervisors President John Ryan sent a letter to Federal Reserve chairman Jerome Powell and Treasury Secretary Steven Mnuchin encouraging the creation of a liquidity facility to support residential servicers.
We’re still waiting to hear word on pending legislation to provide economic relief to consumers and businesses affected by the pandemic. Included in the bill is a funding mechanism for nonbank servicers.