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Black Knight's Deep Dive Part 3: How Housing and Mortgages Move On
Monday, April 13, 2020
In this third article summarizing an analysis by Black
Knight of the potential impacts of the COVID-19 pandemic housing the company
looks at mortgage defaults and servicing. It also reviews some of the actions
that have already been taken to curb potential harm to housing and makes
suggestions about ways technology can be of help. Part 1 of this series can be
read here
and Part 2 here. Layoffs and business closures have sent unemployment
claims soaring by an aggregate of more than 17 million over the last three weeks
and will certainly have an impact on mortgage delinquencies. FHA and the GSE's
Fannie Mae and Freddie Mac quickly directed servicers to make forbearance
available to distressed borrowers and the $2 billion Federal CARES Act will
provide funds that may help homeowners with mortgage payments. It also codifies
the forbearance directives as well as eviction moratoria. Forbearance, however,
may have unforeseen impacts on servicers' - particularly non-bank servicers -
ability to make principal and interest advance payments to investors. Since
Black Knight wrote this, Ginnie Mae has stepped forward to announce it will
advance funds to issuers for this purpose, but servicers for private label
securities and for the GSEs appear to be still at risk.
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