Billionaire Real Estate Investor Says US Commercial Mortgage Market On The Brink Of Collapse Because Of COVID-19
Billionaire Tom Barrack says the US commercial mortgage market is on the brink of collapse because of the coronavirus crisis. The CEO of Colony Capital said the economic ‘domino effect’ could dwarf the Great Depression.
Barrack also said the impact on the US economy has caused high-performing mortgage loans to decrease in value. As a result, he urged Congress to provide $500 billion to allow for loans and repurchasing.
In a Medium post on Sunday, he said the impact on the US economy due to the coronavirus pandemic and the subsequent public health measures taken in response to it has caused high-performing mortgage loans to decrease in value.
Barrack is a longtime friend of President Donald Trump. He warned loan defaults would escalate systematically.
The billionaire said lenders need the tools to undertake loan restructuring.
Barrack claimed loan defaults could trigger a domino effect that would impact the entire real estate market. He also stated that a market collapse of this magnitude would have catastrophic follow-on effects across the American economy.
The United States is facing its greatest economic threat since the Great Depression.
The billionaire also warned Americans will be financially challenged.
With companies announcing layoffs and new problems raising debt, markets have ignored most macroeconomic figures.
The US Department of Labor stated weekly jobless figures are expected to show as many as 750,000 new claims this week alone.