Some lenders are poring over commercial portfolios more frequently than normal — perhaps as often as once a month — to uncover problems hidden by payment deferrals and government stimulus before it's too late.
The Federal Housing Administration said in its annual actuarial report that the capital reserve ratio on its mutual mortgage insurance fund increased to 6.10% in fiscal year 2020, up from 4.84% a year earlier.
Borrower relief is necessary in a national emergency, but if the exclusion of the deferred loans from troubled-debt restructurings is extended past the end of the year, safety and soundness could be compromised.
Forecasts about the pandemic's impact on the mortgage market have grown less dire after forbearance requests by homeowners nearly leveled off in the first half of May.
Democrats’ latest proposal to back debt collectors, enable loans for nonprofits and provide other relief could help steer negotiations with the Senate on more stimulus.
Complaints to the bureau hit an all-time high in April. More than one in five said servicers wouldn't grant deferrals, forced borrowers into forbearance or violated other requirements of the coronavirus relief law.
The bureau said it began developing the standards before the coronavirus pandemic. But more transfers may occur as some servicers struggle to meet their obligations during the economic downturn.
The agency is still moving forward on key regulations dealing with payday lending and mortgage underwriting despite new demands posed by the crisis.
The Borrower Protection Program enables the two agencies to exchange information about loss mitigation efforts and consumer complaints regarding specific servicers.
Researchers predict that the rate will rise in step with unemployment rate projections.