Mortgage Servicer Funding Facility
Policymakers are considering ways to ensure the mortgage servicing industry, the central plumbing of the U.S. housing financial system, remains functional during the COVID-19 crisis.
The CARES Act creates the opportunity for a fast, efficient, cost-effective federal program that, in protecting servicers, protects homeowners for the long term.
Authors Gene Slater, Ted Tozer, and Stockton Williams envision a program that would create a Federal Reserve funding facility for single-family servicers of Ginnie Mae, Fannie Mae, Freddie Mac, and state and local housing finance agency (HFA) home mortgage portfolios. It would enable up to 6.75 million low- and moderate-income homeowners to avoid default on their mortgages despite layoffs and unemployment due to the pandemic.