Executive Summary

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides substantial relief in the form of up to a year of forbearance to homeowners with mortgages backed by federal loans. The Act, however, does not expressly provide for mortgage servicers, who stand to suffer a liquidity shortfall of as much as $100 billion due to this forbearance. The resulting strain on the housing market could have immediate impacts on mortgage availability and price, and the ramifications for the broader economy could equal or exceed the stresses of the 2007-2008 financial crisis.

Introduction

In the face of the economic and social disruption caused by the coronavirus, Congress has enacted three stimulus packages. With an estimated $2 trillion price tag, the third package, the Coronavirus

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