In this analysis, we assess the mortgage-finance provisions of the CARES Act in concert with FSOC’s discussion yesterday of servicers and the Fed’s plans for its manifold windows.  We still see significant statutory challenges and market obstacles to a liquidity backstop for servicers or REITs no matter the trillions soon to flood from Treasury and the Fed.  A way may be found for short-term relief to avoid systemic meltdown resulting from the CARES Act’s generous forbearance provisions, but creativity is the order of the day.

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