Delinquencies

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.

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.

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

Any impact from the coronavirus outbreak on commercial and multifamily loan delinquencies won't be known for some time, the Mortgage Bankers Association said.

While boosting origination volume for lenders and providing financial benefits for borrowers, the refinance boom could have adverse effects down the road, according to TransUnion.

Mortgage delinquencies dropped to a 40-year low in the fourth quarter as strong employment bolstered borrowers' ability to make timely payments, the Mortgage Bankers Association said.

With steady home price appreciation and falling interest rates, by some measures the shares of distressed mortgages existing in the market shrunk to record lows, according to Black Knight.