Delinquencies

Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.

The Consumer Financial Protection Bureau's overhaul of its Qualified Mortgage standard is alarming free-market advocates who say it will precipitate a return to easy credit and higher defaults and could disproportionately harm minorities.

Second-quarter data for credit quality defied conventional wisdom, but experts said that these numbers are being artificially helped right now and the worst is yet to come.

The agency reported signs of stress on the credit quality in residential loans serviced by seven large banks as a result of the COVID-19 pandemic.

Credit card debt has actually gone down since the pandemic struck, with many consumers spending less while using bailout money to chip away at balances. But that may not last.

The enhanced jobless benefits in the coronavirus relief law enacted in March helped limit delinquencies and maintain consumer spending, analysts say. In their follow-up stimulus plan, Senate Republicans want to cut those benefits from $600 to $200 a week.

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The coronavirus relief law allows forbearance plans for up to a year on federally backed mortgages, but House Democrats say homeowners have had difficulty getting relief.

The amount far surpassed that of any other servicer required to purchase Ginnie Mae-backed loans that were 90 days past due.

The report from the regulator offers an industry-wide look at how credit unions have fared during the pandemic. Since the outbreak worsened in April and into May, credit quality could possibly worsen while earnings may sag even further.

First-quarter income for credit unions chartered in the Badger State increased by about 6% from the same period one year earlier.

Industry figures have begun to speak out in support of demonstrations in the wake of the deaths of George Floyd and other African Americans, and new data is expected to show how the coronavirus impacted balance sheets.

The SBA issues guidance on Paycheck Protection Program loan forgiveness; after staffing up for PPP, Bank of America may need to delay investments to meet cost targets; American Express has leaned hard on cloud tech to help employees work at home during the pandemic.

Forecasts about the pandemic's impact on the mortgage market have grown less dire after forbearance requests by homeowners nearly leveled off in the first half of May.

The FHFA says the two government-sponsored enterprises need at least $240 billion of capital before they can go private; Transunion says more than 3% of consumer loans it tracks are in financial hardship.

The Baltimore-area credit union crossed the latest threshold despite a dip in net income during the first quarter as many organizations struggle with the coronavirus fallout.

Just over 40% of respondents with private student loans said they had worked with their lenders to come up with a plan for reduced payments.

More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.

Car loans make up about a third of credit unions' total lending portfolio, and any drop in that sector could resonate across the entire industry.

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.