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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.) 

Fannie Mae and Freddie Mac’s regulator said yesterday that borrowers benefiting from programs that let them skip mortgage payments due to the coronavirus pandemic won’t have to make lump-sum repayments when the crisis passes, Bloomberg News reported. The Federal Housing Finance Agency’s announcement is meant to “combat ongoing misinformation” about the forbearance plans homeowners are entitled to seek under the $2 trillion economic stimulus package enacted last month, Director Mark Calabria said in a statement. “During this national health emergency, no one should be worried about losing their home,” Calabria said. “While today’s statement only covers Fannie Mae and Freddie Mac mortgages, I encourage all mortgage lenders to adopt a similar approach.” There has been growing confusion among borrowers and lenders about how consumers would make up for the payments missed during the forbearances, which could last for as long as a year. The stimulus legislation didn’t outline what happens when the forbearance period ends, prompting some lenders to tell borrowers they might have to make lump-sum payments or meet other onerous terms. The Federal Housing Administration, part of the Department of Housing and Urban Development, as well as FHFA, have since issued guidance to lenders about what terms they should be offering. Still, many companies that service mortgages have been unsure about what the repayment terms should be and in some cases, have been dissuading consumers from taking advantage of the program.

The federal agency that oversees the bulk of the U.S. housing market is stepping in to help cash-starved mortgage firms — but it is exacting a price, the Wall Street Journal reported. The firms, including companies like Quicken Loans Inc. and Freedom Mortgage Corp., have been stuck with mortgages they would typically sell, as borrowers suspend payments amid the economy’s pandemic-driven downturn. The Federal Housing Finance Agency said Wednesday that mortgage firms can sell some of those loans to Fannie Mae and Freddie Mac, the government-controlled companies that buy mortgages and package them into securities. “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending,” FHFA Director Mark Calabria said. Industry officials praised the regulator’s move but suggested that fees Fannie and Freddie will charge for the purchases — from 5 percent to 7 percent of a loan’s value — were high and should be subject to negotiation. The new fees attached to the sale of loans may be cost-prohibitive for many credit unions and limit affordable loan options for home buyers,” said Dan Berger, chief executive of the National Association of Federally Insured Credit Unions. Like banks and nonbank mortgage companies, credit unions originate loans that they sell to Fannie and Freddie.