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Private-Mortgage Market Nears Unraveling, Undoing Decade of Work

  • Virus crisis upends efforts to dial back U.S. role in lending
  • Pandemic stalls markets for private securities, risk transfers
     
Photographer: Daniel Acker/Bloomberg

The nascent market for private U.S. mortgages is teetering on the brink of collapse as the coronavirus crisis imperils years of work to lessen the government’s role in home lending.

Several firms that issue mortgage bonds without federal guarantees have laid off most of their staffs and stopped doing business as the economy grinds to a halt. And the once-burgeoning market for securities that shift risk from government-backed agencies to private investors has also stalled, with some traders saying they’ve had trouble even getting prices.