US mortgage lenders are gearing up for the biggest wave of suspension of loan payments in history. If the time-purchase plan works, they can prevent an even more severe crisis – massive forced removal of people from their homes and chaos in the mortgage market.

Borrowers who lose their income by infecting the coronavirus, as their numbers are already growing at a record 10 million new unemployment claims, may want to skip 180 days of mortgage payments secured by the Federal Housing Agency, avoid penalties and hit the credit their story. However, this is not a mortgage vacation. After all, they will have to pay for everything.

About 30% of Americans with home loans, or 15 million households, can stop paying if the US economy stays closed until the summer.

“This is an unprecedented event”, said Susan Wachter, a professor of real estate and finance at the Wharton School at the University of Pennsylvania. “The great financial crisis lasted for several years. It happens in months, weeks”, added she.

At the same time, creditors are operating in the dark and have no way of predicting the scale or duration of a pandemic or economic damage. If the virus is brought under control soon and the economy goes back to normal, the plan will help borrowers get back on track quickly. The greater the consequences, the more difficult and costly it will be to prevent forced evictions.

“Nobody knows how long this will last. The Mortgage Loan Program allows anyone to press the pause button in the current circumstances and take a deep breath. Then we can look at what the world will look like in six to 12 months and come up with a plan”, says Andrew Jakabovics, a former senior consultant at the Housing and Urban Development Ministry who now works for the non-profit housing organization Enterprise Community Partners.

Even if the economic turmoil is long-lasting, the government will have to find a way to prevent forced evictions, which could mean forgiving some of the debt.

The risks of allowing forcible withdrawals are too great because they will hurt the financial markets and this could infect the economy.

Borrowers need to contact their lenders to get help and avoid blackheads in their credit history, according to the stimulus package that was passed by Congress last week.

Bank of America has announced that it has so far allowed 50,000 mortgage users to defer payments. This includes loans not supported by the Federal Housing Agency, which means that are not covered by the government program.

Last week, Finance Minister Steven Mnuchin convened a task force to address the potential liquidity shortages of mortgage lending companies, which collect payments and have to compensate bondholders, even if homeowners miss them. The group had to make recommendations by March 30.

Mortgage lending companies want the Federal Reserve and the Treasury to use the 2.2 trillion USD economic stimulus plan to help them avoid a liquidity crisis as fewer borrowers make payments and companies are forced to continue to pay bondholders.

But members of the Steven Mnuchin’s Financial Stability Monitoring Council are discussing postponing such a program to see if other recent policies put in place effectively alleviate liquidity shortages, according to well-known sources who wished to remain anonymous, as the talks were private.

Quicken, which serves 1.8 million borrowers, has a strong enough balance sheet to service borrowers while paying its mortgage-backed bondholders. The company plans to nearly triple its call center staff by May to absorb the expected amount of borrowers seeking support.

If a pandemic teaches us something, it’s how quickly everything can change. Just a few weeks ago, mortgage lenders predicted the strongest spring season in years for home sales and mortgage refinancing.