Wall Street Journal: April 7, 2020, Fannie, Freddie Unlikely to Aid Mortgage Companies as Payments Dry Up, FHFA Chief Says
A top U.S. housing-market regulator said he isn’t likely to heed mortgage companies’ calls to help ease the cash-flow crunch they are expecting when Americans who lose their jobs stop making mortgage payments.
The mortgage companies are on the hook to continue payments to investors even if homeowners fall behind. The companies are eventually reimbursed by Fannie and Freddie, but the process could take several months.
The industry has spent weeks lobbying Congress and the Trump administration to establish a lending facility to help finance the billions of dollars of payments they will be obligated to make to mortgage investors.
Fannie and Freddie were taken over by the U.S. government in 2008 after they came close to collapse during the financial crisis. They were given large infusions of cash to keep credit flowing to U.S. homeowners.
But Mr. Calabria said his push to return Fannie and Freddie to private ownership wasn’t a factor in deciding whether or not to help mortgage servicers.