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Many Struggling Homeowners Are Overlooking Payment-Relief Options

A large number of Americans suffering economic difficulties aren't even aware that help is available. This holds even more true for lower-income households.

At least one-fifth of Americans are unaware of mortgage or rent relief options available to help in addressing the financial tumult created by the COVID-19 pandemic, according to Fannie Mae’s latest National Housing Survey covering the second quarter of this year.

In a poll of 1,000 adults, Fannie Mae determined that 76% of respondents were either “not at all concerned” or “not very concerned” about their ability to pay their bills, while 21% were either “somewhat concerned” or “very concerned.” But only 40% of respondents said they were familiar with the mortgage or rent relief programs now available to help households facing money problems at this time, with 56% admitting they knew nothing of these programs.

On the basis of income, those earning $50,000 or lower expressed greater concern about being able to pay their bills than those earning more than $50,000 in a 27% to 14% balance. The lower-income respondents also proved less familiar with the relief options available to help alleviate the financial stress on their housing costs, with 56% of that demographic acknowledging a lack of familiarity versus a 40% admission of unfamiliarity by the higher-income earners.

The lower-income respondents were also more concerned about losing their jobs (33%) versus the higher-income respondents (19%).

Measured along racial lines, Black and Hispanic respondents who were either mortgage borrowers or renters were more concerned about being able to cover their bills than their White and Asian counterparts. Asian mortgage borrowers were more aware of current relief programs than the other demographics while White renters were more familiar with rental relief programs.

In addition, the study showed that although COVID-19 concerns continue to drive certain decisions, they will not have a significant impact on consumers' relocating activity.

“Most surveyed consumers expressed that it’s a bad time to move due to the coronavirus, though that belief improved over the quarter,” said Doug Duncan, Fannie Mae’s SVP and Chief Economist. “Additionally, due to the pandemic, job concerns did get significantly worse in the second quarter, and those who were concerned about losing their job were more likely to think it's a bad time to move. Despite these concerns, consumers are not yet telling us they expect to change their moving behavior.”

Duncan added respondents interested in pursuing homeownership showed an increased comfort level in going through the process through digital and virtual channels. 

“In general, consumer shopping habits have shifted from in-store to online amid the pandemic,” he said. “However, consumers tended to say they would prefer to perform homebuying and renting activities in-person. Interest in online options was strongest for selecting a lender and completing an application online, and grew during the quarter. Since 2018, mortgage holders' preferred method for completing home shopping activities has remained relatively unchanged. Those with a mortgage remain more likely than renters to prefer to complete key home shopping activities online.”

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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