Coronavirus Update #1: Foreclosures Halted, Refinance Rush, New Tax Deadline

The unprecedented consquences of the global spread of coronavirus is rapidly changing the economic landscape, including the impact on real estate and finance.

Evictions and Foreclosures Suspended

President Trump announced that the federal government would suspend both evictions and foreclosures as the coronavirus pandemic continues to worsen, according to CNBC.

The suspension will last until the end of April, the president explained at Wednesday’s daily coronavirus press briefing.

“Today, I’m also announcing that the Department of Housing and Urban Development is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April,” the president said. “So we’re working very closely with Dr. Ben Carson and everybody from HUD.

Demand for Refinancing Keeps Interest Rates from Going Lower

Despite the decision by the Federal Reserve Bank to cut interest rates to nearly zero percent, mortgage rates are hovering around 3.62 percent. The reason for the disconnect between short term rates and longer term mortgages is the rush by homeowners to take advantage of low rates, which is putting pressure on liquidity. Earlier this month, the number of refinance applications were up 479.2% from a year earlier, according to the Mortgage Bankers Association.  Basically, there are many more mortgage-backed securities than investors who wanted to buy them. 

However, the Federal Reserve Bank also decided to purchase $500 billion in Treasury notes and $200 billion in mortgage-backed securities to ensure the smooth functioning of the Treasury bond market and protect credit lines to households and businesses, noted Housing Wire. This move is expected to push rates down over the next few weeks and months, possibly to lower than 3 percent.

IRS Tax Deadline Moved to July 15

For the first time in history, the IRS has extended the federal income tax filing deadline to July 15 to help alleviate the financial pain from the coronavirus pandemic, Treasury Secretary Steven Mnuchin announced Friday, according to CNN.

The decision gives Americans three months more than they normally would have to file their income tax returns for the 2019 tax year, without incurring interest or penalties.

President Donald Trump said that “hopefully” by the time the new deadline arrives “people will be getting back to their lives.”