COVID-19: Bankruptcy Risk for Nonbanks
Forbearance will help save property owners who can’t pay their mortgage, but who’s going to save the mortgage service companies that have to pay the bond holders? Major players in the housing industry say that without a bailout, companies like Quicken Loans, Freedom Mortgage, Mr. Cooper, and other nonbank mortgage companies could have a serious liquidity problem. FHFA Director, Mark Calabria, doesn’t agree. He says there’s no evidence of a systemic failure among nonbanks. The pandemic has triggered concerns about another foreclosure crisis because of all the job losses. That prompted the creation of a mortgage forbearance program for homeowners as part of the $2 trillion Cares Act. www.NewsForInvestors.com
