The federal government should consider extending a lending facility to non-bank mortgage servicers to avoid "significant disruptions" if they run short of funds in making advances on delinquent mortgages, according to the American Securitization Forum.

ASF deputy executive director Tom Deutsch told a congressional committee that the amount of advances servicers have to pay to investors in mortgage-backed securities has "risen exponentially," while the numbers of banks that help servicers finance advances has "shrunk dramatically."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.