of credit to families, businesses, nonprofits, and state and local governments. on the fiscal policy front, the cares act ( coronavirus aid, relief, and economic security act ) provided economic stimulus checks and enhanced unemployment benefits to individuals as well as eviction moratoriums for renters and a requirement that mortgage servicers grant borrowers up to 12 months of forbearance. all of these policy responses were crucial in easing the stresses in financial markets and helping us weather the period when much of the economy was shuttered. an unfortunate consequence of the mortgage forbearance measure was the pressure it put on the funding needs of servicers, particularly mortgage companies, which are required to continue advancing payments on loans in forbearance. in april, ginnie mae alleviated these strains somewhat by announcing a program that provides servicers with financing for principal and interest advances, and which would not be considered a default by the servicer. 4 similarly, in april, the federal housing finance agency ( fhfa ) announced that servicers would be required to advance only four months of missed payments for gse loans. 5 see ginnie mae ( 2020 ), “ ginnie mae approves private market servicer liquidity facility, ” press release, april 7, https : / / www. ginniemae. gov / newsroom / pages / pressreleasedisppage. aspx? paramid = 194. see federal housing finance agency ( 2020 ), “ fhfa addresses servicer liquidity concerns, announces four month advance obligation limit for loans in forbearance, ” news release, april 21, https : / / www. fhfa. gov / media / publicaffairs / pages / fhfa - addresses - servicer - liquidity - concernsannounces - four - month - advance - obligation - limit - for - loans - in - forbearance. aspx. - 8looking back and taking stock although we continue to closely monitor the path of the virus and the public response to it, economic and financial conditions have improved much more than many had expected in the spring. it is a great relief that the most dire scenarios that seemed possible in the spring have not come to pass, which is largely due to supportive fiscal and monetary policy. in addition, the near - term stresses in financial markets have abated, providing support for the very strong recovery to date. the federal reserve ’

led to a sharp contraction in mortgage company activity. in 2006, mortgage companies accounted for around 30 percent of originations ; by 2008, at the bottom of the housing crisis, this share had fallen to around 20 percent. in the past few years, the market share of mortgage companies has risen sharply, well surpassing their share before the housing crisis. today these firms originate about half of all mortgages, including more than 70 percent of those securitized through ginnie mae and the government - sponsored enterprises ( gses ) fannie mae and freddie mac. 1 see you suk kim, steven m. laufer, karen pence, richard stanton, and nancy wallace ( 2018 ), “ liquidity crises in the mortgage market, ” brookings papers on economic activity, spring, pp. 347 – 413, https : / / www. brookings. edu / wp - content / uploads / 2018 / 03 / kimetal _ text. pdf ; and laurie goodman, alanna mccargo, jim parrott, jun zhu, sheryl pardo, karan kaul, michael neal, jung hyun choi, linna zhu, sarah strochak, john walsh, caitlin young, daniel pang, alison rincon, and gideon berger ( 2020 ), housing finance at a glance : a monthly chartbook, october 2020 ( washington : urban institute, october 27 ), https : / / www. urban. org / sites / default / files / publication / 103123 / october - chartbook - 2020 _ 2. pdf. the expansion of mortgage companies in this market partly reflects a decision by many banks to exit that - 4nonbanks also service roughly three - fourths of mortgages securitized through ginnie mae and about one - half of those securitized through the gses. 2 although some mortgage companies specialize in origination or servicing, most large firms engage in both activities. the expanding presence of mortgage companies has brought benefits to consumers and the economy. among the benefits are increased competition and technological innovation. mortgage companies are generally able to react more nimbly to changes in market conditions and have been faster to deploy new technologies such as online mortgage origination platforms. but the rising market share of mortgage companies has also brought with it increased risks. i will focus here on the risks most relevant to financial stability. one major vulnerability of mortgage companies is liquidity — that is, their ability to finance their portfolio