41
Journal
ED DELGADO
ON COVID-19'S
FUTURE DEFAULT
IMPACT
Speaking at an industry event recently,
Five Star Global's President and CEO Ed
Delgado raised concerns over how long the
recovery from COVID-19 could last, and
what its impact could mean for the mortgage
industry.
"If we regard the 2008 housing crisis,
being caused by a 'tidal wave of default,'
with sudden and devastating impact, we
should liken the COVID-19 to a tsunami,
accompanied by a steady and slow rise of
default with uncertainty around how far the
numbers will rise, how much damage will take
place, and how long will it take before the
'water' recedes," Delgado said.
As with all sectors of American life, the
mortgage industry has been deeply impacted
by the spread of the virus. Black Knight
reported that as of April 30, more than 3.8
million homeowners are now in forbearance
plans, representing 7.3% of all active
mortgages. Together, they account for $841
billion in unpaid principal and include 6.1%
of all GSE-backed loans and 10.5% of all
FHA/VA loans.
One of the biggest issues has been
liquidity concerns for servicers brought on
by these forbearance plans. Ginnie Mae
established its Pass-rough Assistance
Program to advance funds to servicers. Its first
release of data revealed it advanced $836,682
in April to three servicers.
Delgado gave the remarks as part of
the virtual Mortgage Industry Pandemic
Summit's morning keynote session. He was
joined for the panel by moderator Jack Konyk,
Executive Director of Government Affairs at
Weiner Brodsky Kider PC; William Shepro,
CEO and Chairman for Altisource; Marcia
Davies, COO for the Mortgage Bankers
Association; and Rob Chrisman, President of
Chrisman LLC.
After the keynote session, the day's
lineup included panels touching on economic
concerns, workforce needs, and a government
update, as well as several roundtable
discussions, focused on origination, servicing,
vendor management, and business continuity
practices.
e event was in partnership with e
Five Star Institute, the Mortgage Bankers
Association, Forrester, and National Mortgage
News.
