Coronavirus

The share of borrowers seeking payment relief rose more than tenfold as COVID-19 concerns grew and authorities encouraged the practice, according to the Mortgage Bankers Association.

The Small Business Administration’s loan processing platform went down Monday for as long as four hours, temporarily halting the ability of lenders to process loans for small business owners seeking relief from the impact of the coronavirus.

The OCC and FDIC are holding off on easing debt limits in response to the coronavirus pandemic, leaving billions of dollars locked up at banking subsidiaries that could be used for lending amid the deepening economic crisis.

Servicers' obligations to advance or temporarily absorb unpaid funds could range from $3 billion to $13 billion per month, according to Black Knight.

Lenders must balance the financial risk of extending credit without explicit backing from the Small Business Administration against the reputational risk of delaying aid for needy borrowers.

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

Ginnie Mae and the FHA provided temporary liquidity relief for mortgage servicers bracing for higher delinquencies, but the industry continues to pressure Treasury and the Fed to provide more comprehensive support.

Sen. Marco Rubio, R-Fla., said that $349 billion will likely not be enough meet loan demand from small businesses seeking a lifeline to help them weather the economic downturn brought on by the coronavirus outbreak.

Ocwen Financial has approximately $749 million of liquidity from various sources to deal with servicing issues arising from the coronavirus, a company press release said.

Nonbank financial firms spent years lobbying against tougher regulation and stricter capital requirements, arguing they didn't pose a risk to the financial system. Now, many of those companies say they are in desperate need of a bailout.