With the $2 trillion dollar stimulus package expected to pass Friday, homeowners affected by the coronavirus pandemic can anticipate some relief from mortgage payments and foreclosures.
According to the bill passed by the Senate, homeowners with federally back mortgages, who have been directly affected by the coronavirus pandemic, could request postponement of mortgage payment of up to 180 days with the opportunity to request an extension of another 180 days.
However, the potential rash of missed mortgage payments sparks concern over how that will affect the real estate finance industry. Mortgage servicers are still expected to pay principal and interest to investors, as well as payments to mortgage and property insurers and local tax authorities.
Once the stimulus package is passed, analysts expect the Federal Reserve to step in with more emergency lending.
“The mortgage industry, like many others, is turning to the Fed to invoke emergency powers and serve its role as the lender of last resort. In this case, the US central bank would provide a line of credit mortgage servicers could draw on to make the payments to mortgage investors on behalf of borrowers.”