The CARES Act includes mortgage-relief language allowing any American with a “federal” mortgage to defer payment for as long as one year following an assertion of adverse COVID financial impact. Millions will surely do so, flooding servicers with calls few have the capacity to handle in the midst also of handling all the refinancings and new loans straining capacity before the crisis. The advances servicers must make to investors will drain scant liquidity and then minimal capital resources at the nonbanks that have become the backbone of federal mortgages in recent years despite a short-term lifeline from Ginnie Mae.
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