Forecasts about the pandemic's impact on the mortgage market have grown less dire after forbearance requests by homeowners nearly leveled off in the first half of May.

Banks could end up holding many low-rate Paycheck Protection Program loans on their books for two years, and dealing with irate borrowers who failed to meet federal requirements for forgiveness.

Up to 12% of loans under the $660 billion small-business rescue program could be tied to misleading or completely phony applications, fueling concerns about lenders' potential liability.

Nearly 70% of U.S. adults between the ages of 26 and 40 said their earnings had been negatively affected by the outbreak, about 10 percentage points higher than other age groups.

The program, created in response to the 2008 financial crisis, generated $19 billion in small-business loans. It could be used as a viable path out of the coronavirus pandemic.

The move is part of an effort by CFPB Director Kathy Kraninger to help smaller lenders by significantly raising loan thresholds for collecting and reporting mortgage data.

The Small Business Administration stopped approving loans when the Paycheck Protection Program hit its cap.

By helping borrowers now, banks hope customers can quickly catch up on payments once the coronavirus pandemic ends. If they can’t, interest income will remain low and charge-offs could pile up if the crisis drags on.

Measures that delay the Current Expected Credit Losses standard and reduce a community bank capital ratio are temporary, but the industry now sees an opening to argue that they should be permanent.

The Small Business Administration said lenders approved $71 billion in loans from the Paycheck Protection Program in less than five days.