The U.S. mortgage industry faces collapse once again, this time due to the economic consequences following the coronavirus outbreak and massive job losses. Up to 50% of borrowers could default on their mortgage payments, according to industry estimates. Since the stimulus bill signed by President Donald Trump provides relief for homeowners but does not provide relief for the mortgage industry, companies are worried they may go out of business.
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Mortgage Industry at Risk
The coronavirus outbreak and subsequent job losses could result in an unprecedented number of people left unable to make their mortgage payments. Facing a second mortgage industry crisis in recent history, many of the country’s largest mortgage lenders are warning they will soon be pushed to the brink of failure. The breadth of the coronavirus pandemic has sparked industry estimates of between 25% and 50% of borrowers being unable to pay their mortgage payments, according to the publication Politico.
Jay Bray, CEO of the mortgage servicing company Mr. Cooper, explained that if 25% of borrowers fail to make their mortgage payments, the industry would need $40 billion to survive for three months. Noting that his company has already seen a 50% increase in borrowers seeking assistance, “The magnitude of people who are going to take the plan is going to be like nothing we have ever seen,” he said. Mortgage Bankers Association CEO Bob Broeksmit added that the industry could need more than $100 billion depending on how long the situation lasts.
However, the Coronavirus Aid, Relief
