Hannah Lang

Fannie Mae and Freddie Mac are now able to buy loans in forbearance to alleviate pressure on the sector, but the fees charged by the mortgage giants to assume more risk could turn away some originators.

The policy move will allow small institutions participating in the Paycheck Protection Program to pledge business loans as collateral to obtain advances.

The FHFA will allow Fannie Mae and Freddie Mac, for a limited time, to purchase loans for which the borrower has sought to postpone payments because of the economic effects of the coronavirus.

Efforts to calm lenders’ fears about coronavirus-related forbearance may not offset tightening standards, and the FHA is less likely to boost volume than it was during the financial crisis.

Tenants have threatened to suspend payments during the pandemic to pressure officials into providing rental assistance, but the effects on multifamily loans would compound concerns about servicers' liquidity and, ultimately, lenders' performance.

The Fed's actions are designed to ensure the flow of credit to midsize businesses and state and local governments hit hard by the economic impact of the coronavirus pandemic.

The central bank is creating a facility to provide financing to banks participating in the Small Business Administration’s Paycheck Protection Program.

The agencies will give the industry another month to submit feedback on the so-called covered fund portion of the rule "in light of potential disruptions resulting from the coronavirus.”

Federal Housing Finance Agency Director Mark Calabria said a virus-induced financial crisis might give rise to more delinquencies and foreclosures than the 2007 subprime mortgage meltdown.

After budget cuts and a strategic transition, the interagency body conceived by Dodd-Frank to identify systemic threats has largely been silent as the pandemic roils the economy.