Two reports from the Wall Street Journal. "Several investment funds focused on mortgage investments are examining assets sales, and at least one is struggling to meet margin calls from lenders. Over the weekend, hedge funds, insurance companies and private-equity firms examined AG Mortgage's holdings, according to people close to the matter. The firm’s market capital, above $700 million before the coronavirus crisis, is down to $92 million. Two Harbors Investment Corp., which has about $1.2 billion in market cap, said last week that it was focused on raising liquidity and reducing leverage. It also delayed an announcement about its first-quarter dividend."

"AlphaCentric, a fund company, said in a statement that its Income Opportunities Fund is looking to raise cash by selling assets, 'as investors react to coronavirus fears by fleeing chaotic markets and seeking safe havens in cash.'"

"The market for issuing securities backed by commercial mortgages has frozen up, leaving some of the biggest names on Wall Street stuck with billions of dollars of loans that are rapidly deteriorating in value. The volume of new loans and demand for commercial mortgage securities in the secondary market have fallen sharply. The spread between the most highly rated securities and Treasury bonds widened to 3.29 percentage points late last week, from 0.86 percentage point at the end of January. That was the widest level since the 2008 global financial crisis, according to Trepp LLC."

"Loans 'that looked great two weeks ago don’t look great today,' said Willie Walker, chief executive of Bethesda, Md.-based real-estate finance firm Walker & Dunlop Inc. 'They all just evaporated.'"

From Bloomberg. "Invesco Mortgage Capital Inc., a real estate investment trust that invests in mortgage-backed securities, is no longer able to fund margin calls. The company said in a statement Tuesday it couldn’t meet calls received the previous day and probably won’t meet additional expected calls in the near term. It’s negotiating forbearance agreements with its financing counterparties, according to the statement. The news sent Invesco’s shares plummeting in early trading."

"The coronavirus is wreaking havoc in the $16 trillion U.S. mortgage market, which is suffering its worst turmoil in more than a decade. Firms that invest in mortgage-backed securities face margin calls and sinking valuations, forcing them to solicit offers on billions in assets in emergency sales."

The Coeur d'Alene Press in Idaho. "When Rich Dussell was asked to comment on the current condition of the local housing market, the Windermere Realtor gave an exhausted chuckle of surrender. 'What housing market?' he replied."

The Tampa Bay Times in Florida. "'We’re seeing purchasing money kind of hold off due to uncertainty,' said David Singer, a Shumaker, Loop & Kendrick attorney in Tampa who works with home buyers who need zoning and variance approvals. 'People are less likely to speed forward into a transaction even though there is supply on the market.' In St. Petersburg, mortgage loan officer Jeff Crain likewise said 'there’s definitely been some slowdown in the housing market.'"

"'We’ve had a couple of contracts — not a lot, but a couple ― (where) clients decided not to move forward, really for no other reason than the uncertainty that’s going on,' said Crain. 'I’ve had some clients who have been pre-approved to purchase that have decided that they’re not going to look to buy at this time again due to the uncertainty with the economy and the market.'"

The American Statesman in Texas. "Amid the global coronavirus crisis, homebuilding is continuing in Central Texas, but at a significantly slower pace to observe social distancing and other public health policies, some builders say. 'Obviously things are slowing down dramatically and it (homebuilding) may come to a screeching halt, but we don’t know,' said Joe Fowler, president of the Home Builders Association of Greater Austin."

From Click 2 Houston in Texas. "One of those selling is Scott Miller, who said, 'Everyday that goes by, the more dust it collects.' Miller told Channel 2 Investigates he recently put his investment property on the market. However, the coronavirus is already having an impact. 'It’s been a little slow getting buyers out to walk the house and see if they’re interested in it,' Miller said."

The Downey Patriot in California. "'Be mentally prepared for surprises.' That’s the advice from Downey Realtor John Lacey, and it applies to the pandemic as well as to the economic upheaval looming ahead. Will there be great bargains to pick up for a song? 'From a buyer's point of view,' said John, 'certainly look to purchase if you have the financial means to weather an extended recovery. Also look for so- called bargains if they fit your portfolio.' 'From a seller’s point of view,' John said, 'be prepared for a slowdown in activity. Wait if you do not have to sell today. Be prepared for lower offers.'"

The Times of San Diego in California. "Social distancing may be good for public health these days, but it isn’t good for the California economy. 'I don’t even want to think about the impact on the pension funds,' said Brad Williams, a veteran budget analyst and partner at Capitol Matrix Consulting. 'We know that pensions were underfunded going into this, and…once you get behind, it’s hard to claw back, so we really need a bounce back in markets to avoid pretty dire circumstances.'"

"The best-case scenario, said Chris Thornberg, founding partner of the consulting firm Beacon Economics, is that social distancing measures will have their desired effect and slow the spread of the virus. In that relatively rosy picture, there is a sharp, but short-term, decline in retail and restaurant spending. But soon the public health emergency abates and economic activity revs back up within a few months. It’s what some analysts call a 'V-Shaped' recession — down and then up again. 'If we have sufficient panic now' — meaning a coordinated pause of daily financial life — 'it will be nothing more than a blip,' he said. 'For once in my life, I’m espousing panic.'"

"But there are less rosy scenarios. If hundreds of thousands of people are sickened, if prolonged periods of isolation are mandated, if individuals and companies are pushed into bankruptcy in the meantime — or all of the above — 'then swaths of people get laid off and that’s when it feeds back on itself.'"

From Multi-Housing News. "From the earliest stages of the coronavirus pandemic, the senior housing industry has been perceived as particularly vulnerable. 'The REIT stocks have been pummeled and the two major publicly-traded operators, their valuations have been severely impacted,' said Senior Housing Global Advisors’ Principal Mel Gamzon, who has spent four decades in the industry. 'We believe as an industry it’s a function of market hysteria out there. There’s no panic and we anticipate no panic,' said Gamzon of the industry. 'Who is panicking are investors in the publicly-traded companies in this industry.'"

From Bisnow. "Simon Property Group temporarily closed all its U.S. retail centers through March 29, the REIT announced Wednesday. Marriott’s U.S. and European occupancy levels have dropped to below 25% — a situation more dire than the quarter after the 9/11 terrorist attacks, Marriott International CEO Arne Sorenson said. 'I can tell you hotel owners are right now having conversations with their lenders, and many owners are saying, ‘We’re going to default on interest. If you want to foreclose and kick us out and take the asset, it becomes your problem. Go for it,' CenterSquare Investment Management Chief Investment Strategist Scott Crowe said."

From Yahoo Finance. "The risk of mass bankruptcies across the U.S. continues to rise as more companies grapple with the fallout stemming from efforts to battle the spread of coronavirus cases, according to one leading bankruptcy professor. According to data watched by NYU Stern School of Business professor emeritus Ed Altman, bankruptcy and default potential for high-yield companies doubled from 5% to 10% in just a few weeks."

"'Today, our numbers are showing a likely default [rate] over the next 12 months of just under 10% that is a huge, unprecedented increase in such a short period of time,' he told Yahoo Finance. 'It does signal a crisis in the credit market whenever you get to that 10% level.'"

"Altman, who pioneered his eponymous 'Altman Z-score' as a standardized way of measuring any company bankruptcy’s risk nearly 50 years ago, says distress in the corporate debt market has now reached levels that haven’t been seen since the 2008 financial crisis. ''The distress ratio, which is the percentage of companies whose bonds are selling above 10% more than [comparable] Treasuries, has spiked to around 30%,' he said. 'That’s incredible. The only time it has ever been higher was in 2008 [in] December when it was around 80%.'"

"But perhaps even more alarming than a distress ratio sitting at highs not seen since the Great Recession, is the speed at which things in the high-yield bond market are unraveling. Altman says it took three months for spreads between high-yield bonds and comparable Treasuries to peak, whereas the same thing has happened now in a mere matter of weeks. 'In all my years, I’ve never seen a spread or distress ratio change so quickly by so much,' he said."

"But as things get worse, Altman points out there is another danger looming in the form of inevitable credit rating downgrades, which could force some investors to shed their holdings if they aren’t allowed to invest in non-investment grade rated debt. 'My analysis showed using the Z-score method that more than 30% of the BBB’s already look like non-investment grade companies and that the impact would be much greater than this 10%,' he said. 'If it was followed by a recession, there’s no question in my mind this would be the worst period for corporate default amounts that we’ve ever seen.'"

"A low interest rate environment had long fueled corporate borrowing. Since the financial crisis, corporations have issued about $1.8 trillion in new bonds globally each year, a rate that was about double issuances over the prior seven years. 'In other words, there was great big debt balloon that peaked right at the beginning of this year — at probably more than 48% to 49% of GDP for non-financial corporate debt,' Altman said. 'We estimate today probably in the high-yield bond market something like $150 billion in corporate defaults, and that’s not even counting the loan market which has also grown dramatically.'"