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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.

A federal housing regulator announced a plan yesterday to provide financial relief to dozens of mortgage servicing firms caught between investors looking to get paid and homeowners who don’t have money because of the coronavirus crisis, the New York Times reported. The Federal Housing Finance Agency said that the firms had to make just four months of cash payouts to bond investors in mortgages that homeowners have stopped paying. After the four-month period, Fannie Mae and Freddie Mac — the government mortgage firms regulated by the agency — will assume that obligation, for up to eight more months, if necessary. The agency and the Treasury Department have faced pressure from mortgage industry lobbyists and legislators on Capitol Hill to come up with a way to make sure mortgage servicing firms do not go bankrupt while providing financial relief to millions of unemployed homeowners. Servicers collect monthly payments from homeowners and use that money to pay property taxes and insurance for the borrower and then send principal and interest payments to the investors in securities that are backed by those mortgages. The structured-finance industry has feared that it could be on the hook for a full year of payments to bond investors, because the federal government’s $2 trillion economic relief package permits homeowners who lose their jobs during the COVID-19 crisis to avoid making mortgage payments for 12 months.

President Trump’s signature hotel in the nation’s capital wants a break on the terms of its lease. The landlord determining the fate of the request is Trump’s own administration, the New York Times reported. Trump International Hotel, just a few blocks from the White House, had been a favored gathering place for lobbyists, foreign dignitaries and others hoping to score points with the president. But like most hotels, it is now nearly empty and looking to cut costs because of the coronavirus pandemic. In recent weeks, the president’s family business has inquired about changing its lease payments, which the federal government has reported amount to nearly $268,000 per month. The Trump Organization owns and operates the luxury hotel, but it is in a federally owned building on Pennsylvania Avenue. As part of its deal to open the 263-room hotel, the company signed a 60-year lease in 2013 that requires the monthly payments to the General Services Administration. Eric Trump, the president’s son, confirmed that the company had opened a conversation about possible changes to the terms of the lease, which could include adjustments to future monthly payments. The Trump Organization has said it is current on its rent.

Insurance premiums for apartment buildings have been rising faster than for the rest of commercial real estate, further squeezing landlord profits during a challenging period to collect rent, the Wall Street Journal reported. Renewal rates for multifamily insurance increased 33 percent on average over the past year, compared with 23 percent for the real-estate sector at large, according to insurance brokerage Marsh, a unit of Marsh & McLennan Cos. Insurers expect rates to keep climbing. Global insurance prices could jump faster in 2020 if the global outbreak of the COVID-19 pandemic leads to a large number of insurance claims around the world. Some insurers pulled back from selling insurance to apartment owners in 2019, and the decrease in competition also contributed to the jump in premiums, said Marc Reisner, managing director of multifamily at Marsh.

With stores shuttered, struggling retailers are skipping rent and asking for concessions, while landlords are demanding payment and having their own tricky conversations with lenders, Bloomberg News reported. So far this month, some mall owners and other retail landlords collected as little as 15 percent of what they were owed, according to one estimate. And it’s expected to get worse, with more than $20 billion in rent payments coming due in May. “It’s all over the map what’s happening out there,” said Tom Mullaney, a managing director in restructuring at Jones Lang LaSalle Inc. “More and more defaults are coming in every single day.” Companies across the U.S. — from small mom-and-pop operations to giant corporations — have missed April payments or sent out relief requests citing store closures because of the pandemic. Landlords have been pitching rent deferment, saying tenants can make reduced payments now as long as they pay the balance at some point. Some businesses are pushing back on that option and asking for rent cuts even after stores are open again. U.S. retail landlords typically collect more than $20 billion in rent each month, according to data from CoStar Group Inc. So far, April rent collection has ranged from 15 percent to 30 percent for landlords with higher concentrations of shuttered businesses, according to an estimate from brokerage firm Marcus & Millichap. Landlords, who are facing their own debt defaults, are getting frustrated. Some are complaining that large corporations are using the crisis to skip out on rent. Others say that they’re not responsible for bailing out tenants and that the federal government or insurance companies should cover the costs instead.

The swelling ranks of unemployed Americans and images of shuttered shops and empty streets have presaged a brewing real estate crisis, Bloomberg Businessweek reported. About $81 billion in commercial rent comes due in a typical month in the U.S. The delay of a sizable portion of that will put an enormous strain on the complex systems for financing real estate and highlight how quickly the pain caused by social distancing has spread. Just 69 percent of renters paid their rent by April 5, according to data from 13 million units published by the National Multifamily Housing Council, compared with 81 percent who paid by March 5, providing an early look at how bad things could get if job cuts continue and households blow through savings. In one scenario, renters would need $96 billion in payment assistance over the next six months, according to an analysis from the Urban Institute. It won’t be much better for homeowners. Roughly 15 million households — about 30% of mortgage borrowers — could miss payments if the economy stays shuttered through the summer, according to Mark Zandi, chief economist at Moody’s Analytics. So far the local, state, and federal governments have responded by imposing temporary bans on foreclosures and evictions, dulling the short-term impact of the economic shutdown in the hope that social-distancing efforts ease later this spring and consumers and businesses get back on track. Those measures won’t be enough, though, if the economy doesn’t rebound quickly. “The initial thinking behind it seems like it was that this is going to last a month or two, and things will go back to normal,” says Tomasz Piskorski, a professor at Columbia Business School, who favors forgiving some interest payments for affected mortgage borrowers. “It buys us some time. But it’s going to take months or years to get back to a new normal.”