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.
The Fed announced several new lending facilities and virtually “unlimited” purchases of Treasury bonds; Ana Botín will donate the money to a coronavirus fund.
The rush to unload mortgage-backed securities signals that a credit meltdown that began with corporate bonds is spreading to other corners of the market.
Refinancing activity is surging, existing borrowers are inquiring about loan modifications, loan closings are being delayed by more complex credit checks — and banks are short on people to handle it all.
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.
The company disclosed that an internal review of a now-discontinued loan program found that employees engaged in misconduct tied to income verification and requirements, among other things.
Fed makes emergency cut, JPMorgan tests contingency plan; the justices appeared divided on whether to give the president power to fire the agency’s director.
