A resumption in quantitative easing — at a pace that dwarfs asset purchases during the financial crisis — is just one of several Fed actions to keep credit markets functioning through the coronavirus crisis.
Federal forbearance on government backed mortgages is a panacea to deal with the economic fall-out caused by the novel coronavirus. But eventually there will be implications in the primary and secondary markets.
Two prominent GSE multifamily lenders cut production in the fourth quarter as they adjusted to the new investment limits set for Fannie and Freddie. The new caps are unlikely to constrain GSE business in 2020.
Many analysts anticipated the implementation of CECL would balloon the loan loss reserves of the GSEs. Last week, though, both enterprises downplayed CECL’s potential impact on first-quarter earnings.
In efforts to move from LIBOR to SOFR, the GSEs informed market participants to expect new language on all single-family uniform adjustable-rate mortgage instruments that close on or after June 1.
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