The nation continues to deal with the ongoing pandemic outbreak of the COVID-19 virus, and sources report that President Donald Trump plans to declare a state of national emergency later today. To support homeowners and address the industry impact that 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.
“The economic struggles brought on by COVID-19 are purely a health crisis, and any industry response must be formulated as such,” said Ed Delgado, President and CEO of Five Star Global. “The U.S. continues to demonstrate record-low unemployment, strong GDP growth, and sufficient liquidity to withstand the impacts from this disease. Now is the time to focus on practical solutions for both the near-term and long-term impacts of COVID-19, in order to assist homeowners and to ensure the stability of the American housing market.”
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.”
More than 25 mortgage banks and nonbank servicers, legal professionals, and service providers will take part in the coalition.
Leadership from the Legal League 100 is also providing context to the discussions, represented by Legal League 100 Chair Roy Diaz, Managing Shareholder of Diaz Anselmo Lindberg, P.A.
While the Mortgage Industry Task Force is part of widespread and ongoing response to COVID-19, the housing market is well-positioned to weather this storm. The market remains in a sustained period of historically low foreclosures. CoreLogic reported last month that the nation’s delinquency rate was 3.9% in November 2019—the lowest November reading in more than two decades.
The share of delinquent mortgages in November historically peaked in 2009 at 11.5%. Since March 2018, the overall delinquency rate each month has been lower than the pre-crisis period from 2000 to 2006. The rate averaged 4.7% during that time.
On Wednesday, President Donald Trump welcomed leaders from the nation’s largest banks to the Oval Office. Among them, Bank of America CEO Brian Moynihan said banks are in a “great position” to face this crisis, with adequate capital and liquidity.
He added that banks want to help all Americans and offer relief to consumers, especially those who have been forced out of work due to the disease.
Citigroup CEO Michael Corbat added to those comments, saying, "This is not a financial crisis."
Corbat addressed that there is a great deal of fear with recent talks of recession, but said banks are ready and able to provide liquidity. He also said that the markets are currently in a "discovery phase" as all parties grapple with the spread of COVID-19 and its impact .
"We're here to help," Corbat said.
In a statement earlier this week, Federal Housing Finance Agency (FHFA) Director Mark Calabria also addressed how the FHFA, as well as Fannie Mae and Freddie Mac, are focusing their response by providing guidance to servicers.
“To meet the needs of borrowers who may be impacted by the coronavirus, last week Fannie Mae and Freddie Mac reminded mortgage servicers that hardship forbearance is an option for borrowers 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.”
Congresswoman and Chair of the House Financial Services Committee Maxine Waters (D-California) led six letters to Administration officials, regulators, financial services organizations, and credit reporting agencies expressing concerns about risks related to COVID-19 and the steps they are taking to prevent consumers and the financial system from being harmed.
"Today, I and Members of the Committee have sent letters to the Department of the Treasury, the Department of Housing and Urban Development, the Department of Justice, the Federal Bureau of Investigation, the Securities and Exchange Commission (SEC), the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the National Credit Union Administration (NCUA), the Consumer Financial Protection Bureau (CFPB), a number of financial industry trade associations, and the major consumer credit reporting bureaus, all to ensure that Americans are protected from the potential negative financial impacts of the coronavirus pandemic," Waters said. "The Committee will be holding bipartisan staff briefings from the Administration, regulators, market participants, economists, and stakeholders, and we will convene a full Committee hearing this month on the readiness of our financial system to weather a pandemic."
She added that it is "unacceptable" to use the current crisis to justify rollbacks of financial regulations that are in place to the financial system and the economy.
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