TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1228068
14 | M R EP O RT T he spread of COVID-19 has caused the U.S.— and the world, for that matter—to come to a screeching halt. The virus, which was declared a pandemic by the World Health Organization on March 11, has caused havoc on Wall Street, closed restaurants, bars, and slowed the economic activity to a crawl. There are currently more than 94,000 cases of COVID-19 in the U.S. and has caused more than 1,400 deaths. In response to the disruption caused by the coronavirus, the Board of Governors of the Federal Reserve, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Conference of State Bank Supervisors, issued a joined state- ment in March saying financial institutions need to work to meet the needs of the consumers. Now, the fear of recession is becoming a real possibility, as Mark Zandi, Chief Economist at Moody's Analytics, told Bloomberg there is now a 60% chance the U.S. economy heads into a reces- sion in 2020. "Housing is being buffeted by two gale forces moving in opposite directions," Zandi told Bloomberg. "The question is, what's the end result of all that? In all likelihood, the recession will trump the lower rates." Leaders from across the hous- ing and mortgage industries spoke to MReport about COVID-19's ripple effect on the stock market, investors, and mortgage rates. The Industry Responds P resident Donald Trump an- nounced on March 11 that he imposed a 30-day travel ban on foreign nationals. "Smart action today will prevent the spread of the virus tomorrow," the President stated. Insurance companies will also be waiving copayments on coro- navirus treatments and extend payments for these treatments. President Trump also announced his plan for workers who will need to be staying home. "I will soon be taking emer- gency action, which is unprece- dented, to provide financial relief," President Trump said. "This will be targeted at workers who are ill, quarantined, or caring for others due to coronavirus." President Trump is also instructing the small business administration to provide capital liquidity to affected firms, and he stated he will be asking Congress to increase funding for this pro- gram by an additional $50 billion. "Using emergency authority, I will be instructing the Treasury Department to defer tax payments, without interest or penalties, for individuals or businesses negatively impacted," the President stated. Additionally, the President on March 13 officially declared a national emergency in response to the outbreak. This declaration allowed access to $50 billion of federal funding to be used for state and local municipalities to combate COVID-19. In response to Trump's an- nouncement, industry leaders reacted, assuring homeowners that they are keeping them in mind. Dr. Mark Calabria, Director of the Federal Housing Finance Agency (FHFA), said the agency is work- ing to provide support to home- owners impacted by COVID-19. "To meet the needs of borrow- ers who may be impacted by the coronavirus, last week Fannie Mae and Freddie Mac reminded mortgage servicers that hardship forbearance is an option for bor- rowers who are unable to make their monthly mortgage payment," Calabria said. "For borrowers that may be experiencing a hardship, I encourage you to reach out to your servicer. The Enterprises and the Federal Home Loan Banks continue to provide support to the secondary mortgage market, and the UMBS market continues to operate at its normal level." Leaders within the mortgage industry came together to sup- port homeowners and address the impact the COVID-19 may have. Under the direction of the National Mortgage Servicing Association (NMSA), leaders from across the mortgage industry are joining forces to create the COVID-19 Mortgage Industry Task Force (ITF) to coordinate on processes, procedures, and policies related to the crisis. Wes Iseley, Senior Managing Director, Carrington Mortgage Holdings, Chairman, NMSA, said, "It's important during crises like this that our industry work together to help our customers in unison. It is our goal to work with the relevant government agencies in order to develop best practices that will enable all parties to get through this difficult period." SPECIAL REPORT: COVID-19 By Mike Albanese COVID-19: The Industry Responds The spread of COVID-19 has caused havoc on Wall Street and throughout American society. What has been the impact on the mortgage industry, and what are leaders doing to protect homeowners?