Trump Considering Plan to Let Homeowners Delay Mortgage Payments

The Trump administration is considering a plan to allow homeowners whose income was cut by the coronavirus to delay mortgage payments, according to the Mortgage Bankers Association, reports Bloomberg.

“This is so big,” Michael Fratantoni, chief economist of the Mortgage Bankers Association said. “We’re thinking of the potential of several months of payments for a lot of homeowners.”

I reported a week ago this type of thinking was going on:

I continue to hear that deep in the bowels of official Washington, government officials, mostly economists and financial people, are working out all possibilities they can think of, including a worst-case scenario where the President locks down a large region, or all of the US. The scenario is considered extremely remote. However, if such a lockdown occurs for an extended period of more than two or three weeks, then many firms, and individuals who live paycheck to paycheck, are going to be in serious financial trouble.

Under such a situation, the thinking is the President might have to declare a temporary moratorium on all debt and rental payments in the locked-down region. This is where the Fed would come in and shore up banks who aren't receiving scheduled debt payments.

-RW