Tag Archives: pandemic

Federal Home Loan Banks during Financial Stress

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I was happy to participate in the discussion group process for the Government Accountability Office’s report, Federal Home Loan Banks: Role During Financial Stress and Members’ Borrowing Trends and Outcomes (GAO-26-107373). The Highlights of the report include

The Federal Home Loan Bank (FHLBank) System consists of 11 federally chartered FHLBanks that support liquidity by making loans to member financial institutions (including banks) in the U.S. As of June 2025, 93 percent of banks (approximately 4,100) were members of an FHLBank, allowing them to obtain liquidity via secured loans. GAO’s analysis found that the FHLBanks generally serve as a reliable and consistent source of funding for banks of all sizes throughout the financial cycle. They can also play a key role in the health of small banks (those with $10 billion or less in assets). This has been the case despite concerns raised in some academic and other literature that FHLBank lending could exacerbate periods of financial stress—for example, by masking problems at troubled member banks or increasing resolution costs when a member bank fails.

Banks’ FHLBank borrowing trends. From 2015 through June 2025, most U.S. banks were FHLBank members and obtained secured loans at least once. Banks’ total outstanding borrowing (as of quarter-end) ranged from $189 billion to $804 billion during this period. Although most active FHLBank members maintained relatively consistent FHLBank borrowing, a small number of large banks (with more than $10 billion in assets) drove substantial increases in aggregate borrowing at the onset of the COVID-19 pandemic in 2020 and during the March 2023 liquidity crisis. For example, large banks were responsible for 97 percent of the increased borrowing in the first quarter of 2023. However, median FHLBank borrowing as a share of median total assets generally stayed within a consistent range from 2015 through June 2025, including for large banks. This suggests that their overall reliance on FHLBank loans during stress periods was largely unchanged.

Outcomes associated with FHLBank borrowing. GAO’s econometric models, which controlled for bank health, macroeconomic factors, and economic cycles, found that higher FHLBank borrowing by a bank was generally associated with positive outcomes for the bank. From 2015 through 2024, higher FHLBank borrowing was associated with (1) increases in real estate lending and (2) lower likelihood of being flagged as a problem bank or of failing or closing voluntarily. These results were largely driven by small banks, which make up 97 percent of banks in GAO’s analysis.

Foreclosure Echo

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David Reiss CC BY-NC-SA

Linda Fisher recently posted a pdf of The Foreclosure Echo: How the Hardest Hit Have Been Left out of the Economic Recovery, a book she co-authored with Judith Fox. It came out before the pandemic, so you might have missed it. The abstract reads,

This book tells the story of the foreclosure crisis from a new perspective – that of ordinary people who experienced it. This angle has not been thoroughly communicated before now. The authors are legal academics who have worked for decades defending low- to moderate-income people from foreclosure and challenging predatory lending practices. They have a wealth of experience representing people whose American Dream was shattered when they were threatened with losing their homes. Using actual experiences – often examined through a legal lens – supplemented by economic, social science and legal research, The Foreclosure Echo explains how people experienced the crisis and how their lenders and public institutions let them down. The book also details the lingering effects of the crisis – such as vacant and abandoned buildings – and how these effects have magnified inequality. Finally, the book suggests reforms that could help avoid another crisis.

It is a timely read, and it resonates with some of the challenges homeowners will face as the consequences of the pandemic work themselves out in the housing market with the expiration of the various foreclosure moratoria that were in effect during the earlier stages of the pandemic.

Law in The Time of COVID: The Ripple Effect in Real Estate

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Dean Michael Cahill

In many ways, COVID-19 has changed the way we live for both the immediate future and long-term. Brooklyn Law School Dean Michael Cahill has been sitting down with members of the Brooklyn Law School faculty to discuss the legal ramifications of our response to COVID-19 and what a post-pandemic world may look like.  Here is the link to our discussion of the effect of the pandemic on the real estate market and beyond: https://youtu.be/j9DFBOsU3qw.