Federal Housing Finance Agency Director Mark Calabria said a virus-induced financial crisis might give rise to more delinquencies and foreclosures than the 2007 subprime mortgage meltdown.
With economists fearing high unemployment stemming from the pandemic, the housing finance system is grappling with how it will recoup lost revenue from delinquencies, forbearance plans and other tremors.
Forbearance and loan-modifications programs implemented after the financial crisis left borrowers bewildered and angry. Now the mortgage industry wants to create a common standard for providing relief to homeowners whose livelihoods have been upended by the coronavirus pandemic.
Mark Calabria said Fannie Mae and Freddie Mac are currently equipped to handle elevated delinquencies, but they might need congressional or Federal Reserve help if fallout from the coronavirus persists.
FHFA Director Mark Calabria said the health crisis will complicate the release of a proposal establishing new capital requirements for Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency authorized the government-sponsored enterprises to contribute $502.2 million to two funds that help preserve and build affordable housing.
Fannie Mae and Freddie Mac are expected to retain “limited and tailored government support” after they are released from U.S. control, Treasury Secretary Steven Mnuchin said in a letter to lawmakers.
Freddie Mac elevated Corley to executive vice president and head of its single-family business, putting her permanently in the role she occupied since last October.
The administration proposed to end the housing trust funds now financed by Fannie Mae and Freddie Mac, and to subject numerous agencies to the congressional appropriations process, among other things.
