Mortgage companies are bracing for a severe cash crunch when Americans who lose jobs and income because of the coronavirus pandemic stop making payments on their home loans, the Wall Street Journal reported. The companies, such as Quicken Loans Inc. and Cooper Group Inc., expect a wave of missed payments from borrowers as early as next month that will force them to come up with tens of billions of dollars on short notice. “It’s going to be a liquidity tsunami,” said Jay Bray, chief executive of Mr. Cooper, one of the biggest such companies, which process mortgage payments on behalf of investors. The mortgage firms are on the hook to continue paying principal and interest on the mortgages they service even if homeowners are in arrears. They are lobbying Congress and the Trump administration to establish a lending facility to help finance the billions of dollars of payments they will be obligated to make. Such a facility would ensure that millions of Americans could obtain “forbearance” agreements allowing them to miss some mortgage payments and make them up at a later date. Fannie Mae and Freddie Mac announced last week that they would suspend for at least 60 days foreclosures and evictions of homeowners who fall behind on their mortgage payments. They have also set up plans for borrowers harmed by the virus to work out a repayment plan over the course of up to a year.
