CEO Outlines Nightmare Scenario For Borrowers, Lenders
MBS Highway President and CEO Barry Habib presented a bleak scenario resulting from the Federal Housing Finance Agency’s announcement Tuesday that mortgage lenders will have to cover four months of missed payments from borrowers under forbearance during the coronavirus pandemic. In a Facebook Live with the Association of Independent Mortgage Experts, Habib warned that lenders may be incentivized to hold on to new loans and potentially ruin borrowers’ credit, unless more federal protection is enacted. He presented a scenario in which a servicer issues a loan and makes 50 basis points on the deal. “If a loan went bad on a first-payment default because they needed forbearance or they’re gaming the system … so on a $300,000 loan, you risk losing $21,000 to…