Mortgage Roundup (5/18/20) – Fed Loans, Risk & Big Government
Good morning! Today is Monday, May 18. Federal Reserve Chairman Jerome Powell is optimistic about the nation’s economic recovery, especially if an effective COVID-19 vaccine is created. NASCAR drivers raced for the first time since the COVID-19 shutdown.
And in mortgage and housing news …
FEDERAL RESERVE: The Federal Reserve is preparing to lend directly to middle-market businesses, filling a hole left by the government’s economic-crisis relief efforts, and it is shaping up to be one of the trickiest things it has ever done.
RISK TOLERANCE: Financial advisors are looking for new ways to measure investors’ tolerance for risk.
WHISTLEBLOWER: A whistleblower is claiming that Wall Street has engaged in widespread manipulation of mortgage funds. As the pandemic hammers the economy, that could increase the chances of another mortgage collapse.
BIG GOVERNMENT: The COVID-19 crisis has unleashed an era of activist (and big-spending) government — something current and previous leaders had declared over, and one that’s likely to remain a central feature of economic policy for years to come.
CANCEL VS. DELAY: While the moratoriums on evictions and foreclosures during the COVID-19 pandemic provided initial relief, the question of how to pay that back rent continues to hover. Some advocates are calling for cancellation of payments versus a delay.
MORTGAGE HANGOVER: Some borrowers who took advantage of federal stimulus funding and mortgage relief are now being told that they will have to wait before they can refinance or obtain a fresh mortgage to purchase a home.
RELIEF WITH A COST: Borrowers with privately held mortgages don’t have the same options as those with government-backed loans. Some are being told they can skip payments, if they make them up all at once.
HOTEL REAL ESTATE: The hotel industry will face imbalances of room supply and demand that lead to consolidation and the conversion of hotel assets into new uses.
PREFAB: Prefabricated and modular building designs have played a big role in quickly constructing medical facilities to fight the COVID-19 pandemic.
REVERSE MORTGAGES: The coronavirus pandemic has forced the reverse mortgage industry to embrace technology.