How the Pandemic Is Stressing the Mortgage System

As the outbreak continues, the country’s housing finance system faces a number of serious threats and challenges.

1 minute read

April 5, 2020, 7:00 AM PDT

By Camille Fink


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Don Layton presents a detailed analysis of the U.S. housing finance system and various stress points that could emerge as the result of the coronavirus pandemic.

Layton’s in-depth discussion covers topics including mortgage-backed securities, Federal Home Loan Banks, non-bank services, private mortgage insurance companies, credit risk transfer, and government-sponsored enterprise.

"If these stresses are not adequately addressed, the impact on the mortgage markets could be severe, making housing finance more expensive and more scarce, and making the mortgage system a continuing source of financial instability," says Layton.

Layton also advocates for a post-mortem to better understand the system’s weaknesses and vulnerabilities. "After the crisis subsides, it will be time for a proper, comprehensive review of housing finance to improve its liquidity, capitalization, and the many operational mechanisms that do not do well in a stressed environment."

Thursday, March 26, 2020 in Joint Center for Housing Studies of Harvard University

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I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

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