Re: NRZ-PC- Berner
I doubt there is any talk of providing direct aid to mortgage servicers. As Powell said today in his conference, the Fed backstops loans to provide liquidity when there is none. So far, there has been no evidence that the banks are unwilling to make loans to servicers so that the servicers can make advances on the loans that they service. Now the banks are making a lot of loans under the SBA programs, but they are unloading those loans, so they should have plenty of funds to be able to lend to the servicers. The Asset backed securities market should also be open, especially since interest rates are now basically zero, so any debt instrument (including servicing advances which are secured debt at the front of the line) with any kind of coupon will attract buyers.
I've noted in several posts on this subject that PennyMac announced such a lending facility the other day. My guess is that certain large investors wanted the Fed to announce a program for servicers because they wanted to stop the selling in these mREITs. Looks like the other programs that the Fed announced turned the credit markets around.