The Federal Housing Finance Agency's director Mark Calabria believes non-bank mortgage servicers should be prepared for a collapse if the COVID-19 pandemic persists. A Bloomberg report reveals that servicers have been working directly with borrowers and renters affected by the virus in order to help these folks keep their homes.
"I want to be optimistic that we can get through this in a short amount of time," said Calabria, according to the report. "If we get to a situation where this goes longer than two months, then there’s absolutely going to need to be a bigger solution."
Servicers could be facing a bit of a cash depletion but with shares in publicly traded mortgage servicers rising on Wednesday, the hopes are to have some money from the government's stimulus allocated to servicers by the U.S. Treasury Department and Federal Reserve.
"We’re preparing so that if some non-bank servicers fail, we’ll be able to transfer those servicing rights, those servicing obligations, to other lenders," said Calabria. "We’re talking to the players, trying to see where we might be able to shift capacity."
Click here to learn more about why mortgage servicers could be at risk during the pandemic.