Fed Accepts Securities Backed by Mortgage Servicing Advances as Collateral under TALF

On March 19, 2009, the Federal Reserve Board announced that it would accept asset-backed securities backed by mortgage servicing advances under the Term Asset-Backed Securities Loan Facility (TALF). Under TALF, the Fed makes loans secured by various categories of collateral. Mortgage servicing advances are loans made by servicers to cover mortgage payments by homeowners. Allowing securities backed by these advances to be used as security for a TALF loan will give servicers capital to cover these advances which will give them more time to work with homeowners on ways to avoid foreclosure.