The Mortgage Bankers Association says comments by the Federal Housing Finance Agency director that the government would not provide liquidity to mortgage servicers are “troubling.”
MBA President and CEO Robert Broeksmit said in a statement April 7 that FHFA Director Mark Calabria sent “a troubling message to borrowers, lenders, and the mortgage market.”
The statement was in response to comments Calabria made to national news outlets Tuesday, including HousingWire, that there would be no liquidity facility for mortgage servicers.
Under both an FHFA plan and the CARES Act, mortgage servicers must offer forbearance options to borrowers with mortgages backed by Fannie Mae or Freddie Mac, but could face a cash crunch as the number of borrowers seeking forbearance rises dramatically.
“Since Fannie Mae and Freddie Mac will eventually reimburse mortgage servicers for the payments they must advance during forbearance, Director Calabria should advocate for the creation of a liquidity facility at the Fed to ensure the stability of the housing finance market,” Broeksmit said in the statement.
A coalition of industry groups, including the Mortgage Bankers Association, had issued a joint statement Saturday calling on federal regulators to assist mortgage servicers “quickly.”
“The director’s unwillingness to offer support from Fannie Mae and Freddie Mac for the very firms that he and Congress asked to execute his agency’s forbearance plan only reinforces why the Federal Reserve and U.S. Treasury must create a financing program to help residential and commercial/multifamily mortgage servicers who will have to provide unprecedented levels of mortgage payment forbearance,” Broeksmit said in Tuesday’s statement. “Servicers are eager to provide this help, and while we all hope that the duration and severity of the economic dislocation caused by the pandemic will be manageable, we must plan now for a more extended disruption.”
Broeksmit added that he had communicated the MBA’s position on these issues directly to Calabria Tuesday evening.
The FHFA has not yet returned Banker & Tradesman’s request for comment.
