Mortgage defaults

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.

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.

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.

Real estate investor Tom Barrack said predicted a “domino effect” of catastrophic economic consequences if banks and government don’t take prompt action to keep commercial mortgage borrowers from defaulting.

Fannie Mae completed its first two Credit Insurance Risk Transfer transactions of 2020, shifting $1 billion of single-family loan credit risk to insurers and reinsurers.

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

Black Knight introduced a model to gauge prepayment speeds and credit risk for investors that purchase commercial mortgage-backed securities.

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 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.

The outlook for hotels and suburban offices is still questionable, but the prognosis for other property types in the securitized commercial real estate market remains fairly strong, according to Moody's Investors Service.