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Gaps in Mortgage Payment Ability

Analyzing data from the Census Bureau Household Pulse Survey, the Urban Institute identified how black homeowners were more likely to miss or defer mortgage payments in May and reported higher uncertainty for June payments.

The Pulse survey also reveals significant differences in ability to pay mortgages this month and who expects to be able to pay next month. Among people with mortgages, 28% of Black homeowners did not pay or deferred their mortgage in May, compared with only 9% of white homeowners. Latino and Asian American homeowners with mortgages paid this month at rates of 15% and 11%, respectively.

The prospects for June look a bit different, Urban notes. Black and latino homeowners with mortgages expressed similar rates of concern about paying their mortgages—27% and 25%, respectively, had slight or no confidence—compared with only 10 percent of whites. Asian American homeowners were more concerned about paying their mortgages than a month ago: 18 percent had slight or no confidence.

"As these data suggest, the policy and programmatic responses to the COVID-19 crisis and its impact on housing stability cannot take a one-size-fits-all approach; rather we need race-conscious interventions that address the needs of renters and homeowners of color. In addition, policy solutions should focus on meeting the needs of lower-income renters who faced housing instability before the crisis began and now face the greatest risk of eviction," said Urban researchers.

Urban researchers suggest dramatically scaling up housing counseling, mediation, and loss mitigation programs to ensure borrowers have safe and affordable options for exiting those forbearance plans and do not face penalties or adverse outcomes as they work to get back on solid financial footing. Programs must remain focused on keeping people in their homes and avoiding a new wave of defaults and foreclosures, which would create a housing market crash a few months from now.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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