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Study: How the Pandemic Is Impacting Mortgage Delinquencies

Nearly 11 million households fell behind on their mortgage and rent payments during the first three months of the COVID-19 pandemic, according to a new report published to the Mortgage Bankers Association's (MBA) Research Institute for Housing America (RIHA).

The report, titled "Housing-Related Financial Distress During the Pandemic," culled previously unpublished data from the Understanding America Study, an internet panel survey of more than 8,000 households. The data analysis determined that 5.14 million homeowners, of 8% of the national total, missed or deferred at least one mortgage payment during the pandemic’s first three months while 5.88 million renters, or 11% of the national total, either missed, delayed, or reduced payment on their housing costs.

Furthermore, the report found the percentage of those who reported having lost a job in the past two weeks held steady throughout the quarter, with roughly 2.5% of renters and 1.5% of mortgagors becoming unemployed. Approximately 9% of employed renters and 8% of employed mortgagors were working fewer hours than at the beginning of the pandemic, while 12% of renters and 6% of mortgagors were receiving unemployment insurance benefits by the end of June.

“RIHA's study shows that households were largely successful in navigating a difficult economic landscape and continued to make their housing payments during the first three months of the outbreak. In contrast, nearly half of student debt borrowers missed at least one payment,” said Gary V. Engelhardt, co-author of the report and Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. "Data from other sources reveal that this trend has continued through August. With the first round of federal stimulus having run its course, and Congress deadlocked in passing another round of relief, families' continued ability to meet their housing obligations during the ongoing pandemic is critical to the health of the housing and mortgage industries.”

The report follows the release of the MBA’s 2020 National Delinquency Survey for the second quarter, which reported the delinquency rate at 8.22% by June 30, with roughly 20% of mortgagors receiving permission from their lender to delay or reduce their monthly payment. Of those mortgagors not receiving permission, only 3.3% missed a payment. The MBA estimated missed mortgage payments were as much as $16.3 billion for the second quarter.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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