If this decision were based on projections/fears about property values they would cease or dramatically cut back all loans secured by real estate. I think this

If this decision were based on projections/fears about property values they would cease or dramatically cut back all loans secured by real estate. I think this decision is driven more by projections on (1) the average borrower’s ability to repay given the swift and dramatic economic changes, (2) uncertainty around legislative changes that might temporarily make the terms of these and other loans less favorable to banks, and to a lesser degree (3) the pecking order for HELOCs in the event of foreclosure. Italy suspended mortgage payments during their lockdown and (correctly, IMO) forced banks to bear some of the financial burden of the economy grinding to a halt. It’s certainly less likely for the US to pass a similar measure but it’s entirely possible that banks could be required to do significantly more “rehabilitation” on defaulted home loans than they have in the past. That’s an expensive undertaking for a bank even in the best of economic times.