Delinquencies

More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

ABS participants saw markets freeze and were bracing for worse when federal aid provide a short-term respite. The question now: How much trust can anyone put in the medium-term and beyond?

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.

The agency has relaxed some reporting requirements and joined other regulators in encouraging banks to help borrowers, but pressure is building on the bureau to do more to aid consumers suffering financial hardship.

Mark Calabria said Fannie Mae and Freddie Mac are currently equipped to handle elevated delinquencies, but they might need congressional or Federal Reserve help if fallout from the coronavirus persists.

Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.

The falling rates continue a three-year trend of improving performance across numerous commercial mortgage sectors including multifamily, office and retail.

Any impact from the coronavirus outbreak on commercial and multifamily loan delinquencies won't be known for some time, the Mortgage Bankers Association said.

According to Moody's, Ally's latest auto-loan ABS will not require the issuer to repurchase loans with modified terms or maturities.