Some people worry that a huge number of tenants can’t and won’t pay rent leading to a wave of mortgage defaults by landlords. Typically 38% of the population are renters and they are often the economically weakest 38% of society. Thus landlords are already accustomed to having tenants with a high probability of defaulting; that’s the risk landlords take to be in that business. 
   The people most hurt by the economic impact of the virus are often those on the lowest rungs of the economic ladder such as restaurant workers, amusement park workers, etc. As such they don’t have any money to invest and thus their tragic situation will have a disproportionately small impact on the economy. 
   Thus investors should not leap to bearish opinions simply because the virus has created a high unemployment rate and higher than usual risk of mortgage and tenant defaults.
   The mortgage industry adopted excessively strict underwriting rules in response to the big real estate crash of 2008, thus today’s mortgages are structurally sounder than those of previous decades and thus they are better able to survive the potential risk of virus induced tenant defaults. 
   If one is looking to avoid credit quality risk in bonds then one should consider avoiding corporate debt as corporate borrowers have allegedly persuaded rating agencies to give them a “BBB” investment grade when they may well deserve a “junk”  rating of “BB”. 
   The psychology of a mortgage borrower is that he doesn’t want to lose his down payment through foreclosure and wants to keep owning a property even if the value has dropped to where there is no equity. This is because of the optionality feature: if you own property with no equity it acts like a cheap call option on real estate and thus may be worth hanging on to in hopes of a recovery, by contrast, few non-real estate corporations except the big six banks and Detroit automakers ever get a bailout, thus corporations tend to be run by ruthless, cynical managers who may decide to go into default and walk away from their debts.
   Thus I’d rather take my chances with “BBB” rated mortgages than with corporate debt rated “BBB”.