COVID-19: Mortgage Servicing Advance Facilities – What to Watch For

With forbearance now available for consumers under agency loans for up to a year and with states starting to follow suit, how will non-bank mortgage servicers fund the resulting shortfalls to investors and other third parties? Ginnie Mae has announced that it will revise its servicer advance facility to make it less onerous and more user friendly. The Federal Reserve Board, it is reported, may or may not provide its own dedicated mortgage servicer advance facility. Securities backed by servicing advance receivables are eligible collateral to back borrowings under the Federal Reserve Board’s newly revived Term Asset-Backed Securities Loan Facility (TALF). But how will servicers repay the advance facilities even if they are available?

Please join Mayer Brown partners Jon Van Gorp, Krista Cooley and Larry Platt as they discuss how this industry sought to address the issue a decade ago during the last financial crisis, what are the questions for which we are waiting for answers and whether the FHA partial claims process may alleviate the potential pain for Ginnie Mae servicers.

For more information on Mayer Brown’s extensive resources in relation to COVID-19, please visit covid19.mayerbrown.com.

Mayer Brown’s Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm’s global resources from multiple practices and offices, the initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.