Coronavirus mortgage bailout: 'There is going to be complete chaos,' says industry CEO

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A broad coalition of mortgage and finance industry leaders sent a plea to federal regulators, asking for desperately needed cash to keep the mortgage system running. This, as requests from borrowers for the federal mortgage forbearance program are flooding in at an alarming rate.

In an interview on CNBC last Wednesday, Mark Calabria, director of the FHFA, which oversees Fannie Mae and Freddie Mac, said he estimated about 2 million borrowers would seek forbearance by May. He did not agree that servicers need liquidity now, only later.

Others, however, have much higher estimates for the forbearance program. Laurie Goodman, co-director of the Housing Finance Policy Center at Urban Institute, predicted a worst-case scenario of nearly 12 million borrowers receiving some kind of forbearance at a cost of $66 billion for six months. Mark Zandi, chief economist at Moody's Analytics predicted about 15 million households would receive some forbearance on their home loans.

Even as Americans begin to receive checks from the government, there is no guarantee they will use that money to pay their mortgages. The forbearance program forbids servicers from asking for any proof of hardship. Bray said that was the right course. Stevens said borrowers should have been required to show at least some proof of hardship, which they had to do during subprime mortgage bailout. Moral hazard aside, he, too, contended a liquidity facility for servicers is essential.

 

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Based upon this article, the mortgage bailout sounds like a hot mess! “He said he was told there would be federal cash for servicers, but that part of the deal never made it to the final act.” I’m concerned about requiring documentation on the back end instead of the front.

Virginia death rate is now under 2% for deaths: total China Virus Covid 19

Do you have one guest on your show that says FUCK BAILOUTS in business you either fail or succeed - and when you fail you don’t beg for help - you ducking fail and try again

Ahhh Socialism here we come and it is now supported by CNBC. Let’s play the blame game because you maybe gave some wrong investment advice......

Well this is weird. Im told by fat balding business men on CNBC that life is good and this is just a bump in the road. Nothing to worry about.

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