Ensuring continuity of servicing operations: The Council encourages Congress to consider establishing a fund financed by the nonbank mortgage servicing sector to provide liquidity to nonbank mortgage servicers that are in bankruptcy or have reached the point of failure. The fund should be designed to facilitate operational continuity of servicing, including loss-mitigation activities for borrowers and advancement of monthly payments to investors, until servicing obligations can be transferred in an orderly fashion or the company has been recapitalized by investors or sold. The legislation should outline the scope and objectives of the fund, which include avoiding taxpayer-funded bailouts. The legislation should also provide sufficient authorities to an existing federal agency to implement and maintain the fund, assess appropriate fees, set criteria for making disbursements, and mitigate risks associated with the implementation of the fund. The establishment of such a fund should be accompanied by the additional regulatory authorities and consumer protections recommended in the Council’s report.
Does this mean those pesky credit risk transfers funded by FnF are finally going away?
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