Distressed

Mortgage lenders are preparing for the biggest wave of delinquencies in history. If the plan to buy time works, they may avert an even worse crisis: Mass foreclosures and mortgage market mayhem.

Mortgage servicers need direction from federal agencies on how to implement the forbearance plans called for in the CARES Act, according to the Community Home Lenders Association.

The impending wave of loan delinquencies because of the coronavirus hurt private mortgage insurer earnings, but the companies will still have sufficient capital, a Keefe, Bruyette & Woods report said.

While the mortgage market began the year healthy, lenders and borrowers need to prepare for the impacts of the coming coronavirus recession.

Mortgage lenders could benefit from the surge in refinancing due to widening market spreads, and that could help offset damage to servicing rights portfolio valuations, according to Keefe, Bruyette & Woods.

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

The delinquency rate for commercial mortgage-backed securities ended 2019 at its lowest point in nearly 11 years, aided by increased issuance and the resolution of legacy transactions, Fitch Ratings said.

The owner of the MacArthur Center Mall in Norfolk, Va., has defaulted on a $750 million loan which includes the property as collateral.

The share of severely underwater mortgages shrunk by over two percentage points compared with a year ago, as these borrowers benefited from the rise in equity levels, Attom Data Solutions said.

GameStop's plan to shutter up to 200 stores could adversely affect commercial mortgage-backed securities loans with a combined allocated property balance of almost $42 million, according to Morningstar Credit Ratings.