Mark Calabria Continues to Block a Much Needed Mortgage Bailout

Mark Calabria Continues to Block a Much Needed Mortgage Bailout

The future of the housing industry seems to currently rest on the head of the Federal Housing Financing Agency (FHFA), Mark Calabria.  He is the one who is preventing a bailout to the independent mortgage companies that are now in deep trouble due to the number of payment forbearances that continue to roll in.  After being appointed to his role by President Trump, he seems more committed to the plan to detach Fannie Mae and Freddie Mac from the quasi-government role they currently play than he is to the health of the mortgage industry.  If he allows independent mortgage companies to fail, this will dramatically increase the power that banks who have access to the Federal Reserve have, as well as dry up the liquidity needed to keep the current mortgage system functioning.  Without access to mortgage loans through independent mortgage providers who have been impacted by the Administration’s willingness to allow payment forbearances without proof of hardship, it will ultimately take out a large number of potential home buyers.  Without the supply of buyers, home values will be impacted.

 

In economic news, stock investors are celebrating advances in medicine to fight the Covid-19 virus.  They are hoping that as early as spring of 2021 we will all have a vaccine.  Although this is still a ways out, it provides hope for the future.  Further, hope for American’s to return to work is also holding stock prices higher.  Although this rally is not based on any fundamental economic strength, stock investors don’t seem to care.

 

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