Consumer lending

Credit inquiries for auto lending, revolving credit cards and mortgages fell sharply in March as unemployment surged, according to a Consumer Financial Protection Bureau report.

The bureau issued an interpretive rule clarifying that consumers under certain conditions can modify or waive waiting periods required by the Truth in Lending Act and Real Estate Settlement Procedures Act.

More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.

The agency is still moving forward on key regulations dealing with payday lending and mortgage underwriting despite new demands posed by the crisis.

By helping borrowers now, banks hope customers can quickly catch up on payments once the coronavirus pandemic ends. If they can’t, interest income will remain low and charge-offs could pile up if the crisis drags on.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

The coronavirus relief legislation could result in private mortgage insurers having to hold more capital, a B. Riley FBR analyst report said.

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.

The agency has relaxed some reporting requirements and joined other regulators in encouraging banks to help borrowers, but pressure is building on the bureau to do more to aid consumers suffering financial hardship.

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.

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.

The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.

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 pandemic has upended staffing plans, sparked concerns about servicers’ capacity to handle the expected crush of missed payments, and even raised questions about their ability to stay afloat.

With small businesses feeling the financial scourge of the coronavirus, bridge loans could be the direction they turn to keep things afloat.

Bankers say they understand the need for an extraordinary government response to the coronavirus outbreak, but worry that even slashing interest rates won’t stimulate demand.

Facebook and other social media platforms are a powerful way to connect members and loan officers, but lenders must ensure they first have a culture of compliance.

Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.

Kathy Kraninger was grilled about whether her agency and others were doing enough to cushion consumers from the economic blow of the coronavirus crisis.

U.S. lawmakers are pushing regulators to provide room for banks to work out loans with businesses and consumers who may be affected by the coronavirus.