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.
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.
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.
New York Gov. Andrew Cuomo promised a 90-day moratorium on mortgage payments for financially strapped New Yorkers because of the coronavirus.
As financial hardships mount with the COVID-19 outbreak, Fannie Mae and Freddie Mac released their plans for mortgage borrowers impacted by the pandemic.
A number of proposals have been floated for debt payment holidays and other types of moratoria, but such approaches offer solutions that are worse than the problems.
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.
A national moratorium would be costly to lenders and servicers, but proponents say it's needed to help cushion the economic blow of the pandemic.
No-interest loans and overdraft forgiveness are among the lifelines banks are offering to consumers and small businesses whose livelihoods are being upended by the economic fallout.
Mortgage companies that borrow heavily to keep their operations running may face financial pressure from coronavirus-related market volatility as it affects the valuations of collateral securing their financing.