New mortgage and refi applications may still be flowing as customers seek to take advantage of low rates. However, the feds are preparing for a mass influx of mortgage defaults tied to the pandemic.
CNBC reports both government and independent regulators for the mortgage industry are now working on plans to deter another foreclosure crisis. While it takes 90 days for a loan to become delinquent officially, the expectation is that there will certainly be a spike.
“We’re on the front end of this. We don’t know,” Mark Calabria, director of the Federal Housing Finance Agency (FHFA) which currently oversees Fannie Mae and Freddie Mac under government conservatorship, told CNBS. “If this goes more past the summer, certainly it’s going to call for a different set of responses.”
For now, Calabria said borrowers do not need to have been sickened by the virus to qualify, only to show financial hardship.
Read more about the government plans for foreclosures.