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Black Knight reported that of all of the types of mortgages available, government-insured mortgages have the greatest share of loans in forbearance that have little to no equity, National Mortgage News reported. This could negatively affect how those loans are treated when the forbearance period ends, the company said. The great majority of borrowers with forborne government-insured loans have 20 percent or more equity in their homes. But "just 9 percent [of borrowers with forborne loans] have 10% or less equity — typically enough to cover the cost of a sale of a property — with another 1 percent underwater on their mortgages," Ben Graboske, president of Black Knight's data and analytics division, said in a press release. "Of course, this leaves a population of nearly half a million homeowners who may lack the necessary equity to sell their homes to avoid foreclosure in a worst-case scenario," he added. About 19 percent of Federal Housing Administration and Veterans Affairs mortgages in forbearance were at loan-to-value ratios at 90 percent or higher, the firm found.

Floridians who can’t make their residential mortgage and rent payments due to the coronavirus pandemic and subsequent economic slowdown are getting a break for another month, Law.com reported. Gov. Ron DeSantis issued an executive order on Monday extending the suspension of foreclosures and evictions through 12:01 a.m. July 1. “We are committed to getting Floridians back on their feet as we move forward with our #SafeSmartStepbyStep plan for Florida’s recovery,” DeSantis said in a tweet yesterday, referring to his recovery plan. The move comes just days after New York Gov. Andrew Cuomo was sued by a group of landlords who allege his May 7 executive order extending the state’s moratorium on evictions through Aug. 19 violated their contract and due process rights and amounted to an improper taking of their property under the U.S. Constitution. DeSantis first imposed a 45-day moratorium April 2 and extended it until May 14. The second extension was to expire Tuesday when DeSantis opted for another extension. More than 2 million new unemployment claims have been filed in Florida, according to the Department of Economic Opportunity’s dashboard.

Mortgage availability has tightened sharply as lenders impose tougher income, credit-score and down-payment conditions and drop some loan types altogether, such as home-equity lines of credit, the Wall Street Journal reported. The economic shock from the coronavirus pandemic explains some of this credit crunch. But the economic factors have been exacerbated by policy decisions in Washington, D.C., industry officials say. As part of its March relief bill, Congress let homeowners suspend mortgage payments for up to a year but provided no way to pay for this, potentially saddling lenders with the burden. Meanwhile, federal regulators make it hard for loans where borrowers might seek forbearance to get the backing of Fannie Mae and Freddie Mac, which guarantee nearly half of residential mortgages. One indicator of the credit crunch is that the volume of mortgages being refinanced, which normally rises sharply when rates drop, is up only modestly since before the pandemic, according to Black Knight, a mortgage-data and technology firm. Another indicator is mortgage rates themselves: They are roughly a percentage point higher than they ordinarily would be given current Treasury-bond yields.

Fannie Mae and Freddie Mac extended their suspensions on mortgage foreclosures through at least June as U.S. homeowners continue to be hit hard by lost jobs and income amid the coronavirus pandemic, Bloomberg News reported. The two mortgage giants, which backstop about $5 trillion of home loans, won’t push for forced sales of properties on which borrowers have stopped making payments. Fannie and Freddie initially announced the halts on foreclosures in March, though the relief was set to expire May 17. “During this national health emergency, no one should be forced from their home,” Federal Housing Finance Agency Director Mark Calabria, the company’s regulator, said in a Thursday statement. Providing aid to mortgage borrowers has been a central element of the U.S. government’s response to the coronavirus economic crisis. As part of the $2 trillion stimulus bill passed in March, Congress allowed homeowners suffering through pandemic-related hardships to delay their payments for as long as a year if their loan is backstopped by Fannie, Freddie or a federal agency.

The Consumer Financial Protection Bureau has come to a settlement with Specialized Loan Servicing LLC (SLS), a mortgage-loan servicer based in Colorado, NationalMortgageProfessional.com reported. The consent order requires SLS to pay $1.275 million in monetary relief to consumers in the form of redress and waiver of borrower deficiencies, pay a $250,000 civil money penalty, which will be paid to the Bureau and deposited into the Bureau’s Civil Penalty Fund, and implement procedures to ensure compliance with the Real Estate Settlement Procedures Act (RESPA) and its implementing regulation, Regulation X. The CFPB’s found that since January 2014, SLS violated RESPA and Regulation X by taking prohibited foreclosure actions against mortgage borrowers who were entitled to protection from foreclosure, and by failing to send or to timely send evaluation notices to mortgage borrowers who were entitled to them. These violations also constitute violations of the Consumer Financial Protection Act of 2010. In some cases, SLS’s violations of Regulation X short-circuited the protections against foreclosure for consumers whose homes were ultimately foreclosed upon.