MBS

The Federal Reserve Board should create a dedicated facility for mortgage servicers to access in order to make required advances, industry participants and observers, including its largest trade group, said.

The $16 trillion U.S. mortgage market — epicenter of the last global financial crisis — is suddenly experiencing its worst turmoil in more than a decade, setting off alarms across the financial industry and prompting the Federal Reserve to intervene.

The Federal Housing Finance Agency authorized the government-sponsored enterprises to lend additional support to the mortgage-backed securities market and temporarily allow some flexibility in lending requirements to address coronavirus-related concerns.

The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.

Additional mortgage-backed securities purchases by the Federal Reserve Bank of New York will address private investor skittishness about the asset class, but it will not necessarily lower rates.

A number of proposals have been floated for debt payment holidays and other types of moratoria, but such approaches offer solutions that are worse than the problems.

The Trump administration is considering a plan to allow homeowners whose income was cut by the coronavirus to delay mortgage payments. Still to be decided is a mechanism for borrowers to catch up.

Mortgage real estate investment trusts are taking stock of their financial ability to respond to market shocks and other concerns stemming from the coronavirus.

Canadian policymakers are escalating their efforts to backstop the nation’s financial system and ensure banks have plenty of room to continue lending through the coronavirus crisis.

The Federal Reserve's most recent economic-stimulus effort could reduce disparities between a rally in Treasurys and a relative slump in mortgage-backed securities that contributed to higher average home-lending rates last week.