On average, borrowers in forbearance as of February had missed-and will eventually need to repay-8 monthly mortgage payments, totaling about $8,300. We found that, in February 2021, about 2.4 million borrowers had missed 2 or more payments-the equivalent to about 90% of the 2.7 million mortgages in forbearance. When the forbearance period ends, homeowners will need to work with their loan servicers or lenders on how they can repay missed payments. New foreclosures in June 2020 were down by about 85% (about 6,000) compared to the same time in June 2019 (40,000) before the pandemic. The federal moratorium on foreclosures also seemed to have worked. As of February 2021, about 5% of active loans (about 2.1 million mortgages) were in forbearance, with payments suspended. Use of forbearance dropped sharply in June 2020, as many borrowers who entered into forbearance immediately after the option became available did not extend their use of this protection. In May 2020, the use of the forbearance provision peaked at about 3.4 million mortgages, representing about 7% of all single-family housing loans. Mortgage forbearance has been widely used-an indication that it was a needed relief for struggling homeowners. This includes mortgages that are issued by public lenders, as well as the VA, Rural Housing Service (part of USDA), and FHA loans. The CARES Act provided 12 months of forbearance, but federal entities extended forbearance to 18 months.įor homeowners at risk of foreclosure, a moratorium was enacted to prevent mortgage servicers from initiating foreclosure on properties owned by homeowners who were experiencing financial hardship due to COVID-19. This housing protection only covers federally-backed mortgages-meaning home loans made, guaranteed, or securitized by federal entities. However, about 75% of mortgages in the U.S. Mortgage forbearance allowances under the CARES Act provided homeowners with federally-backed mortgages the option to temporarily suspend their monthly mortgage payments. There were 2 protections for struggling homeowners under the CARES Act- a forbearance period for mortgage payments and a moratorium on foreclosures. What housing protections were available to homeowners?
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