It was not that long ago when non-bank mortgage lenders were lobbying for a much needed bailout due to the cash crunch from Covid since borrowers were postponing payments; now there is news that Quicken Loans confidentially filed for an IPO and other fellow lenders might follow; quite the turnaround from a few short months ago; these lenders package the loans into bonds and continue to service the loans, which has amplified the risk with 8.5 percent of mortgages currently in forbearance; if the economy continues to remain shut at current levels the number could rise to 30 percent which will force most of the lenders into a sever cash shortage; non-bank lenders account for more than 50 percent of originations but insight into their balance sheets has always been a sore subject amongst lobbyists; we might soon get the chance to see how well positioned these firms are as the pandemic continues to challenge the economy as a whole. Financial Times.
