flexiblefullpage - default
Currently Reading

How the Mortgage Industry’s Cash Crisis May Hurt Borrowers

Advertisement
billboard - default
Financing

How the Mortgage Industry’s Cash Crisis May Hurt Borrowers


April 14, 2020
Bank Sign
By BillionPhotos.com

The recently passed Cares Act includes a provision that allows homeowners to stop paying mortgages for up to a year, and with unemployment claims at an all-time high, people are rushing to get their loan payments delayed. Although this is great for those who would otherwise have to foreclose on a home, servicers are starting to feel the strain as there is no provision to assist them, and they must continue to make payments to investors while loans are deferred. Many lenders are now asking Congress to step in and create some sort of financial plan to help lenders in this time, as eventually these challenges will not just hurt lenders, but borrowers as well as their loans could be transferred to other servicersor it may become increasingly hard to secure a loan altogether. 

The federal government’s rush to support homeowners in the wake of the coronavirus pandemic should help many Americans avoid foreclosure, but it could have negative consequences for the mortgage industry.

Whether the government steps in to assist the industry could determine whether mortgage companies stay in business — and whether borrowers face even more financial difficulties.

The $2.2 trillion CARES Act stimulus bill that President Donald Trump signed into law last month included a provision guaranteeing that any homeowner with a federally-backed mortgage could stop making mortgage payments for up to a year if they face financial hardship because of the COVID-19 outbreak.

Read More

 

Related Stories

Financing

Some Lenders Now Offer Bargain Mortgages, but Experts Say They May Not Be a Good Idea

Americans can now buy a home with just 1% down, but experts warn there are risks associated with bargain mortgages 

Demographics

Younger Generations Are Staying Away From the Housing Market—Here’s Why

Gen Zers and Millennials are most disadvantaged by a financial crisis caused by soaring inflation and stagnant wage growth, and as a result, many are boycotting a volatile housing market

Financing

FHA Introduces Plan to Help Mortgage Borrowers With Monthly Payments

The Federal Housing Administration is working to reduce monthly payments for homeowners struggling to pay their mortgages by introducing a new payment supplement program

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category



Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.