FHFA

Efforts to calm lenders’ fears about coronavirus-related forbearance may not offset tightening standards, and the FHA is less likely to boost volume than it was during the financial crisis.

The agency said it is aligning policies for Fannie Mae- and Freddie Mac-backed loans in forbearance so that servicers are only responsible for advancing four months of missed payments.

The administration and Congress are said to be close to adding $310 billion to the small business loan program; the department is looking at whether it can prevent banks from seizing government checks.

Federal backing for firms facing a deluge of missed mortgage payments is still on the table despite recent comments by an official who questioned the need to help the industry.

The Borrower Protection Program enables the two agencies to exchange information about loss mitigation efforts and consumer complaints regarding specific servicers.

At issue is whether the U.S. should step in now to save nonbank mortgage servicers to head off damage to the housing market.

A bipartisan group of lawmakers wrote in a letter to the Treasury secretary that the Financial Stability Oversight Council should create a liquidity facility to deal with a flood of forbearance requests brought on by the coronavirus pandemic.

Lawmakers want to expand the two-day old small business loan program by another $250 billion; Calabria says nonbanks are exaggerating their financial woes as forbearance claims rise.

Federal Housing Finance Agency Director Mark Calabria said a virus-induced financial crisis might give rise to more delinquencies and foreclosures than the 2007 subprime mortgage meltdown.

The ICBA chief’s plea for a six-month halt to regulations not related to the pandemic followed similar calls by community groups and a key Senate Democrat.