A provision of the CARES Act allowing borrowers impacted by the pandemic to delay payments on loans backed by the GSEs for one year could have significant consequences for credit-risk-transfer (CRT) securities according to Bloomberg. Financial experts note that the losses, totaling between $1 billion to $2 billion, from these delayed mortgage payments to GSEs would ultimately fall on CRT securities investors. Michael Canter, the director of securitized assets and U.S. multisector fixed income at AllianceBernstein, notes that this provision would violate the spirit of the agreement, “This is not supposed to be a transaction where Fannie and Freddie walk away with a windfall and do not have losses. Such a result would be contrary to the spirit of the economic arrangement.” Other financial experts note that if no fix for this provision is provided, future investors may be hesitant to invest in the $50 billion CRT market. Earlier this year, SFA sent a letter to the Federal Housing Finance Agency urging them to take action on this issue.