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A contentious new fee on U.S. mortgage refinancings has been delayed until Dec. 1, according to the regulator overseeing mortgage giants Fannie Mae and Freddie Mac, Reuters reported. The 0.5 percent fee, aimed at recouping potentially billions of dollars in losses created by the coronavirus pandemic, was originally set to take effect on Sept. 1. The regulator, the Federal Housing Finance Agency, also said the fee would not apply to mortgages worth less than $125,000. Fannie and Freddie had announced the fee earlier this month amid a boom in refinancings as borrowers looked to take advantage of record-low interest rates. But the new fee was met with swift criticism by the banking industry, consumer groups and members of Congress, who were wary of what the new cost could mean for struggling borrowers and the entire housing market during such a tumultuous economic time.

This summer’s markets rally hasn’t helped banks and investors who lent about $2.7 billion to build the country’s second-largest mall, near the Meadowlands Sports Complex in New Jersey, the Wall Street Journal reported. The American Dream Mall has been shut since March, and mutual funds that bought municipal bonds backing its construction have since taken hundreds of millions of dollars in paper losses. The troubles highlight the growing disconnect between ailing segments of the U.S. economy and the surge on Wall Street. Even with schools in New Jersey preparing to reopen, American Dream remains closed because of a state order aimed at reducing the spread of the new coronavirus. The longer the hybrid mall and amusement park goes without paying customers, the harder it will be for its owner, Triple Five Group, to repay the money it borrowed from banks and mutual funds in 2017. The price of some of American Dream’s roughly $1 billion of municipal bonds fell to about 87 cents on the dollar in July after Triple Five disclosed that the mall was losing tenants. The bonds had traded around 120 cents before the coronavirus struck the U.S., according to data from Electronic Municipal Market Access. Municipal-bond mutual funds operated by Nuveen, which owned about $600 million face value of American Dream debt this spring, took paper losses of about $196 million on the investment from March through June, according to a Wall Street Journal analysis of fund reports published by Nuveen. Interest payments over the period reduced the net paper loss to $183 million, according to a Nuveen spokeswoman.

Retail landlords are including pandemic language in new leases, a previously rare feature as tenants seek protection after the first government-mandated coronavirus shutdowns in March complicated their negotiations for rent relief, the Wall Street Journal reported. Because many insurance policies didn’t cover pandemic-related losses, landlords have offered various concessions to attract and retain tenants, including allowing them to defer part of their rent if another shutdown is ordered. Both sides get breathing room: Tenants are able to lower expenses while landlords are still able to collect some money for overhead and their mortgage. “You have to provide the tenant an easy decision. If you make it complicated, you’re not going to get this done,” said Philippe Lanier, principal at EastBanc, a property developer, owner and manager of 25 open-air retail properties in Washington, D.C.’s Georgetown neighborhood. Lanier has offered to cut the minimum base rent to 50 percent if the District of Columbia prohibits tenants from operating their business again because of the coronavirus, and for the tenant to repay the difference in six equal monthly installments on the first day after reopening. He also is open to leases structured on a percentage of the retailer’s sales—“percentage rents”—which would limit tenants’ expenses if their sales decline. He said he had signed amended leases with around 30 retail tenants, with an additional 15 still in the works. Real-estate brokers said that landlords have to contend with a glut of stores and social-distancing measures that have forced many retailers to shrink the number of stores. The trend puts more bargaining power in the hands of tenants such as restaurants, apparel retailers, grocery stores and discount stores that are still expanding. “We have begun to clarify and strengthen some of our force majeure language to more clearly define governmental shutdown, et cetera, which could happen for a multitude of reasons,” said Josh Goldstein, director of real estate and store development at Pet Supplies Plus, referring to “act of God” clauses that allow tenants to terminate leases or reduce rents in extraordinary circumstances. Questions remain about how long Covid-19 will persist, and some businesses are wary about the recent resurgence in infections in California, Texas and Florida. Landlords have extended more relief to tenants such as small local and regional apparel retailers, salons and restaurants that have felt the most pain. They also said they anticipate more tenant bankruptcies.

The New York Attorney General’s Office yesterday sued the Trump Organization, President Donald Trump’s son Eric Trump and two lawyers who have worked with the Trump Organization, asking a New York County Supreme Court judge to compel the defendants to comply with subpoenas, the National Law Journal reported. Attorney General Letitia James is investigating “whether the Trump Organization and Donald J. Trump … improperly inflated the value of Mr. Trump’s assets on annual financial statements in order to secure loans and obtain economic and tax benefits,” according to court documents. Land-use attorney Charles Martabano, tax attorney Sheri Dillon and Dillon’s firm Morgan, Lewis & Bockius are also named as defendants in the suit. Martabano and Dillon each worked on matters related to Seven Springs, a Westchester County estate. One focus of the investigation is whether the Trump Organization and its agents improperly inflated the value of Seven Springs, according to court documents. “Valuations of Seven Springs were used to claim an apparent $21.1 million tax deduction for donating a conservation easement on the property in tax year 2015, and in submissions to financial institutions as a component of Mr. Trump’s net worth,” wrote Matthew Colangelo, chief counsel for federal initiatives in the AG’s office. A number of other Trump properties, including Trump National Golf Club – Los Angeles, Trump International Hotel and Tower Chicago and the Manhattan office tower at 40 Wall Street are also part of the investigation, according to court filings.

The number of serious mortgage delinquencies rose to a 10-year high in July, according to a report released Friday by financial data firm Black Knight, The Hill reported. The number of homes with mortgage payments more than 90 days past due but not in foreclosure rose by 376,000 in July to a total of 2.25 million, according to Black Knight. Serious mortgage delinquencies are now at the highest level 10 years and have increased by 1.8 million since July 2019. While the total number of delinquent mortgages dropped nearly 7 percent since June, the record rise of serious delinquencies is a troubling sign in the wake of the recent expiration of federal foreclosure and eviction protections. The Coronavirus Aid, Relief and Economic Security (CARES) Act enacted in March imposed a ban on foreclosures and evictions until July 31. The Trump administration and lawmakers failed to reach a deal to extend those protections after they expired, and an executive order issued by President Trump to mitigate the damage may not be sufficient to protect all who are at risk of losing their homes, according to housing advocates.

Last October, Catie McKee, a hedge fund analyst, had been scrutinizing the mortgages on the nation’s malls, and was convinced that some of those malls would default on their loans, the New York Times reported. McKee made her case to Carl Icahn, who had made a similar wager and invited her team to discuss the trade. Nothing would bolster her confidence — and the prospects for her trade — more than if the billionaire and onetime corporate raider backed her up. Both agreed that e-commerce, changing consumer habits and evolving demographics had pummeled all malls to some degree in recent years, but some were far worse off than others. So by betting on their demise, both could profit handsomely — which they did. Icahn, whose hostile takeover of TWA in the 1980s established him as a major dealmaker, has made $1.3 billion on the trade since that meeting. And the investors that made the trade within McKee’s firm, MP Securitized Credit Partners, more than doubled their money. Trapped between the growth of online shopping and the popularity of discount chains, many retailers have struggled to find a foothold in the changing firmament. The nation’s roughly 1,000 shopping malls (excluding strip and outlet malls) have borne the brunt of the problems, with hundreds of them fighting low occupancy and the loss of major stores, known as anchors. The coronavirus pandemic, which prompted stay-at-home orders, increased the financial strain on malls by choking off much-needed foot traffic and cash flow. “The pandemic sped up the rate of demise for CMBX 6 malls by being the final straw for a lot of struggling retailers and mall owners,” McKee said, referring to the obscure real estate index that she bet against because of its exposure to troubled malls. The private equity fund Apollo Global Management, which runs an internal hedge fund that focuses on credit investing, made more than $100 million shorting the CMBX 6 and other commercial real estate securities — one of the fund’s most successful trades of the year. Jason Mudrick, whose New York hedge fund, Mudrick Capital, focuses on distressed investments, estimated that he had made the same amount. So did Scott Burg, chief investment officer at Deer Park Road, a fund in Steamboat Springs, Colo. So far this year, 16 percent of all retail industry loans are delinquent, according to statistics tracked by the data firm Trepp. Major retailers, including J.C. Penney, Neiman Marcus and Modell’s Sporting Goods, have filed for bankruptcy, and new tenant demand for mall space has never been weaker, according to an analysis of national malls by the advisory firm Green Street.

Expecting the virus to be under control by Labor Day, many employers had hoped to bring white-collar workers back to the office next month, the Wall Street Journal reported. But as cases rose in dozens of states throughout the summer, major school districts settled on remote or hybrid instruction, complicating the picture for working parents. Some employers have already scuttled plans to force office workers back so soon. They include some of the country’s biggest companies. In an August survey of 15 major employers that collectively employ about 2.6 million people, 57 percent said that they had decided to postpone their back-to-work plans because of recent increases in COVID-19 cases. Nearly half said they were putting in additional safety measures for when they reopen, such as redesigned workspaces and temperature checks. Only one respondent said the summer surge of infections hadn’t affected its timeline or plans for bringing workers back. The survey was conducted by the Pacific Business Group on Health, whose members include Boeing Co., Salesforce.com Inc. and Lowe’s Cos.