The coronavirus crisis could lead to extensive problems for the mortgage industry. The Federal Reserve is keeping a close eye on the sector in order to avert a crisis, and in particular is focusing on mortgage servicers.

Home owners who are financially harmed by the coronavirus outbreak can postpone their mortgage payments under the terms of the government’s economic relief package. The mortgage servicers themselves, however, are still on the hook for monthly payments, and their balance sheets might not be able to handle the volume of payments coming their way.

“The mortgage market is at the center of our economy,” said Federal Reserve Chairman Jerome Powell on a Brookings Institute webinar this morning.

The industry is calling for the government to provide a backstop.

Mortgage forbearances are already skyrocketing. According …continued .
[Original Source: CNN]