By Jim Perskie Freddie Mac CEO David Brickman said Thursday the housing market is “facing its greatest challenge in more than a decade” and that the impact of the coronavirus will be felt over the next year, at least. Brickman expected home sales – and perhaps home prices – to fall significantly in the second quarter before beginning to recover. “While home prices increased in the first quarter, the future effect of the COVID-19 pandemic is highly uncertain and dependent on the pace of economic recovery,” he said in discussing Freddie Mac’s first quarter financial results. “The decline in home prices could be significant if forbearance and foreclosure mitigation do not limit the effect on home prices.” The Labor Department…
Freddie Mac on Thursday reported significantly lower earnings for the first quarter of the year as the impact of the coronavirus pandemic began to seep into the mortgage markets late last month. The company’s first quarter net income of $200 million was down from $2.6 billion for the fourth quarter of 2019. Comprehensive income dropped from $2.4 billion in Q4 2019 to $0.6 billion in Q1 2020. Freddie Mac attributed the decrease to: Higher credit-related expense of $1.1 billion primarily driven by higher expected credit losses on loans as a result of the pandemic.Losses on single-family loans held in inventory due to effects from the pandemic, combined with lower gains on single-family reperforming and nonperforming loan sales due to a…
Mark Calabria appears to have misjudged the burden the coronavirus pandemic is going to have on the mortgage industry. Calabria, the director of the Federal Housing Finance Agency, told HousingWire earlier this month that he expected about 1 million mortgages backed by Freddie Mac and Fannie Mae to go into forbearance. Financial technology firm Black Knight found that there were nearly 1.4 million Fannie and Freddie loans in forbearance as of Friday, April 19 – representing 4.9 percent of their mortgages. “In these times, it is essential to both our industry and for the benefit of the entire U.S. economy to have a clear understanding of the magnitude of the mortgage forbearance situation,” Black Knight CEO Anthony Jabbour said. Calabria has been…
