Securitization

The Federal Reserve's emergency rescue of the U.S. mortgage market should have set off celebration among lenders trying to keep up with demand from borrowers. Instead, executives at Quicken Loans got a hefty margin call.

Federal Reserve officials restated their pledge to hold the benchmark interest rate near zero and will keep buying bonds, judging that the coronavirus pandemic "poses considerable risks to the economic outlook over the medium term."

More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.

FHFA Director Mark Calabria stated that he was directing the GSEs to "add liquidity" to the markets, but the actions of the FHFA say precisely the opposite.

The Federal Housing Finance Agency has promised to take care of advances on principal and interest payments for coronavirus forbearances after four months, but servicers remain concerned about other responsibilities.

The nascent market for private U.S. mortgages is teetering on the brink of collapse as the coronavirus crisis imperils years of work to lessen the government's role in home lending.

FHFA head Mark Calabria and his FSOC counterparts need to sit down with the Treasury and fashion an emergency capital plan for the GSEs.

The Federal Reserve's $2.3 trillion loan stimulus includes plans for outstanding commercial mortgage-backed securities and newly issued collateralized loan obligations.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

Ginnie Mae and the FHA provided temporary liquidity relief for mortgage servicers bracing for higher delinquencies, but the industry continues to pressure Treasury and the Fed to provide more comprehensive support.