As forbearance wave hits, real estate industry begs Fed to take action
Several large trade groups want a Federal liquidity facility
The commercial real estate industry is asking the federal government to buy bonds, assets, or lend money to mortgage banks as forbearance requests pile up.
Some of the industry’s biggest trade groups signed a letter asking the Federal Reserve to create what’s called a liquidity facility to support lenders and free up cash flow, according to Inman.
In this case, it could mean the government buys a lender’s bonds or loans money directly to the lender, among other options.
The National Association of Realtors, the Mortgage Bankers Association and the National Association of Home Builders are among the signers.
They argue that a liquid facility is needed so banks can provide forbearance and other relief measures to homeowners and residential landlords who will have trouble making payments. Many have been asked to provide up to 90 days forbearances to borrowers.
“…the final piece of the puzzle… [would] ensure that the entire industry can deliver much-needed economic relief to consumers through this unprecedented forbearance plan,” the letter read.
Some in the industry say the federal government’s $2 trillion CARES Act coronavirus relief measure doesn’t do enough for landlords.
Some government agencies have taken their own measures to support lenders, including non-bank lenders.
Fannie Mae and Freddie Mac will give their own borrowers a break on mortgages if they do not evict tenants during the pandemic. [Inman] — Dennis Lynch