The coronavirus pandemic has added a layer of concern to today’s homeowners, particularly for those affected by job losses or furloughed positions. The question many are asking themselves: “How will I pay my mortgage?”
According to a new Bankrate report, most consumers with a mortgage worry they will miss a payment in the next three months. Sixty percent of these individuals have not yet reached out to their lenders for payment relief options, however.
Many (34 percent) reported they didn’t know there were relief options, according to Bankrate.
“For households struggling financially due to the pandemic, payment relief is available—but you have to ask for it,” Greg McBride, chief financial analyst at Bankrate, says. “Make this a top priority. Forbearance can ease the strain of what may well be two of the biggest components of the household budget.”
Not all homeowners are staying quiet about their struggles, however, The Mortgage Bankers Association’s latest Forbearance and Call Volume Survey shows that loans in forbearance have increased from 6.99 percent of servicers’ portfolio volume to 7.54 percent in the week ending April 26. A total of 3.80 million homeowners are currently in forbearance plans, according to MBA’s estimates.
“The share of loans in forbearance increased once again in the last full week of April, but the pace of new requests slowed,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “With millions more Americans filing for unemployment over the week, the level of job market distress continues to worsen. That is why we expect that the share of loans in forbearance will continue to grow, particularly as new mortgage payments come due in May.”
Right now, the markets are relatively flat in terms of mortgage applications, which increased 0.1 percent from the week prior. Purchase volume, however, has gone up for the third consecutive week, buoyed by strong growth in Arizona, Texas and California. Looking at historical levels, purchases are still down (by almost 19 percent) from last year.
“As states across the country begin to re-open their economies, a silver lining we are seeing is indications of increased activity in the housing market, including more purchase applications in some markets,” said Fratantoni. “We are hopeful that the housing market can eventually contribute to a broader rebound in economic activity, which would then begin to reverse the unprecedented job losses experienced during this crisis.”
As the coronavirus and its impact on the industry unfold, RISMedia is providing resources and updates. Get the latest.
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas at email@example.com.