April 24, 2020

Bloomberg: Democrats Urge Guidance on Loan Payments Once Forbearance Ends

A group of politically centrist House Democrats wants the Treasury Department, Federal Reserve and housing regulators to issue guidelines on how borrowers’ missed mortgage payments will be handled once the current period of coronavirus-permitted forbearance concludes.

  • The group, known as the New Democrat Coalition, also urges the agencies to create a liquidity facility that will allow “mortgage servicers to fund the payments they must advance to loan owners during the forbearance period,” according to Thursday letter
  • The lawmakers, led by Washington Representative Denny Heck, say that any servicer that makes use of the liquidity facility should offer forbearance and loan-modification procedures to borrowers whose mortgages aren’t backed by the federal government
  • The three steps are important in preventing “the mortgage market from becoming a vector for damage to the financial system as it was in 2008,” the lawmakers write in letter to Treasury Secretary Steven Mnuchin, Fed Chairman Jerome Powell, Federal Housing Finance Agency Director Mark Calabria, Housing and Urban Development Secretary Ben Carson, Agriculture Secretary Sonny Perdue and Veterans Affairs Secretary Robert Wilkie

By:  Jesse Westbrook
Source: Bloomberg Government
--->