Servicing

The Department of Housing and Urban Development's 60-day foreclosure halt for Federal Housing Administration borrowers is too short to help reverse mortgage borrowers, a letter from consumer groups stated.

A growing number of real estate investment trusts are facing margin calls, putting increased strain on mortgage market infrastructure and adding to pleas for relief to be included in pending legislation.

Detroit-based mortgage giant Quicken Loans could be facing a cash crunch in coming weeks and possibly need temporary emergency federal assistance if lots of borrowers stop making payments on their home mortgages during the coronavirus pandemic, according to a news report.

Independent mortgage bankers had their most profitable fourth quarter in seven years for originations, but the fallout from the coronavirus could upset the economics of the industry in the short term.

The Federal Reserve Board should create a dedicated facility for mortgage servicers to access in order to make required advances, industry participants and observers, including its largest trade group, said.

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 percentage of mortgages underwater — when a mortgage exceeds value — has decreased dramatically in South Florida since the Great Recession, meaning the region may be better prepared to weather COVID-19 than the downturn a decade ago.

Real estate investor Tom Barrack said predicted a “domino effect” of catastrophic economic consequences if banks and government don’t take prompt action to keep commercial mortgage borrowers from defaulting.

With increased economic distress because of the coronavirus, lenders are likely to see an increase of borrowers looking for a mortgage rescission, arguing they are eligible for an extended filing time frame.

Accommodations for borrowers affected by the coronavirus pandemic, such as payment delays and fee waivers, are "positive and proactive actions that can manage or mitigate adverse impacts," the regulators said.