While aggressive federal and state intervention and temporary corporate measures have prevented a surge in evictions and foreclosures, the housing and rental market has fallen into a severe crisis that threatens the ability of millions of Americans to stay in their homes even if the coronavirus pandemic eases in the coming months, the Washington Post reported. The speed and broad reach of the disruption are likely to pit landlords and mortgage companies against homeowners and renters, with each side claiming that it needs more assistance and fueling calls for billions in new aid for the housing sector. The tension could be evident this week as mortgage and rental payments come due for millions of Americans who have lost their jobs as the novel coronavirus has shuttered the U.S. economy. This is especially true in high-priced regions where stimulus payments of $1,200 per adult, for those making under $75,000 a year, are unlikely to cover more than a month of rent or mortgage payments, if that. Already, at least 3.8 million homeowners have sought mortgage relief and were not making their payments by the end of April, a 2,400 percent increase from early March, according to Black Knight, a mortgage technology and data provider. That number is likely to increase drastically this week as the country’s unemployment rate hits levels unseen since the Great Recession, lenders and housing advocates say. Read more.
In related news, Fannie Mae said on Friday that first-quarter income dropped about 81 percent to $461 million, compared with the same period last year, as it booked $2.7 billion in credit expenses, the Wall Street Journal reported. It projects loan losses from economic disruption caused by the Covid-19 pandemic to total $4.1 billion. More than 1 million borrowers are already missing payments, representing about 7 percent of the single-family loans it guarantees, Fannie said. That figure is expected to double to 15 percent in the coming months as people lose jobs and incomes as a result of coronavirus-related lockdowns. Read more. (Subscription required.)
