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12 | M R EP O RT COVER STORY T his year will be remem- bered for many things when it's time to pen the history books, and that's true on the housing front as well. With leadership changes at the Federal Housing Administration (FHA), the Supreme Court ruling on important topics such as TCPA and the constitutionality of the CFPB, the GSEs' ongoing move toward privatization, and a presidential election only a few short months away, it would have been quite a noteworthy year for the industry even before the global impact of the COVID-19 pandemic swept through. Leaders within the mortgage industry, the government, and re- lated sectors are facing an ongoing economic crisis on top of an on- going health crisis, facing a nation swept by job losses, an uncertain future, and many homeowners actively seeking forbearance or at least concerned about being able to continue making their housing payments. With the future presenting more questions than answers, MReport spoke to economists and subject-matter experts from Realtor.com, SitusAMC, the Urban Institute, and more to discuss how shifting policies, changing homebuyer outlook, and the results of the November elec- tions will change the face of the industry landscape. Charting a Course Through Murky Waters T he rise and spread of the coronavirus pandemic caused the housing and mortgage indus- tries—and the global economy, for that matter—to grind to a screech- ing halt. As of July 7, 2020, Black Knight reported there were 4.14 million homeowners in forbearance plans, which represents 7.8% of all active mortgages, and which was up from the prior week's 6.8%. According to Black Knight, 6% of all GSE-backed loans and 11.6% of loans backed by the Federal Housing Administration and the VA are currently in forbearance plans. An additional 8.2% of loans in private-label securities (PLS) are also in forbearance. Additionally, Fitch Ratings reported that mortgage loan delinquencies recorded the largest increase in two years—with delin- quencies rising for all loan types. Nonprime loans experienced the greatest annual increase in delinquencies in June, rising 21.8%. Black Knight reported in June that the national delinquency rate rose by 90.22%, with more than 1.6 million new delinquencies since March. Edward Golding, Executive Director of MIT Golub Center for Finance and Policy, told MReport that forbearance programs initi- ated by the $2.2 trillion CARES Act were key but admitted "we made the same mistakes we made in 2008." "We should allow easier [refi- nances], regardless of forbearance or employment status," Golding said. The Federal Reserve stepped in as the pandemic spread, lowering the benchmark interest to nearly zero—between 0% and .25%. Average 30-year fixed-rate mortgages have fallen to historic lows, with the av- erage rate falling to 3.02% as of July 9, according to Freddie Mac. The Fed also announced plans to continue purchasing mortgage- backed securities at its current pace until it feels the economy has recovered. Danielle Hale, Chief Economist, Realtor.com, said recent actions by the Fed helped provide liquidity to the mortgage market. "This is helping to keep rates low amid a time of incredible market uncertainty and make it worthwhile for buyers to stay active in their pursuit of homes," she said. Hale added that the CARES Act is working to prevent tem- porary hardships from becom- ing "long-term problems" for homeowners with the creation of mortgage forbearance plans. "Many of the Fed's programs were adapted from programs rolled out during the last eco- nomic crisis," Hale added. "To the extent that these policies are effective at helping the nation's homeowners get through this pandemic, they may be a template for dealing with future crises." Tim Rood, Head of Industry Relations, SitusAMC, said policymakers in housing finance have had to pivot from managing one of the strongest housing and credit markets in recent years to dealing with the unprecedented impact of COVID-19. "Due to the collateral damage from the pandemic and mandated quarantines, the focus of policy- makers has largely shifted from housing reform plans published last September to loss mitigation and foreclosure prevention," Rood said. Rood, though, added the Fed continues to "aggressively" make a market for Agency RMBS and U.S. Treasuries, causing interest rates to fall to record lows. "Record low interest rates are fueling a surge in home and mort- gage demand, which has man- aged to keep the housing market buoyant during a historically large economic collapse in quarterly GDP and unemployment rates above 10%," Rood added. He added that he does expect there to be pressure at the federal, state, and local levels to increase moratoriums and provide ad- ditional forbearance and modifica- Housing Policy for a Nation in Crisis From Supreme Court rulings to changes at HUD and FHA, here are the issues in play this election season as the federal government works to assist homeowners. By Mike Albanese