Fewer than five million households failed to make their rent or mortgage payments in the second quarter of 2021, although the effects of the COVID-19 pandemic are still being felt across the country.
Noisy Association of Mortgage Bankers Research Institute for Housing America (RIHA), 8.6% of tenants (2.86 million households) missed, delayed, or made a reduced payment in June 2021, while 4.6% of homeowners (2.19 million) missed their mortgage payment. In addition, 28 million borrowers (44.8%) missed their payments.
Since the pandemic began in Q2 2020, 6.8% of renters and 5.7% of homeowners have missed four or more payments, according to the MBA. Missed rental payments now total $ 41.7 billion, missed mortgage payments total $ 76.5 billion, and missed student loan payments total $ 155 billion.
The delta variant of the coronavirus has slowed the tipping point after the pandemic outbreak 15 months ago.
“The recent surge in COVID-19 cases and heightened inflationary pressures could slow economic growth and hiring. This potential headwind could also affect households that are still in trouble, ”said Gary Engelhardt, economics professor at the Maxwell School of Citizenship and Public Affairs at Syracuse University. “Given government support during the pandemic and recent improvements in the economy and labor market, it is entirely possible that the observed rent losses are at or near pre-pandemic levels.”
Property owners continue to play a key role in helping tenants, as 11% of renters missed a rental payment, 4.4% missed two payments, 2.7% missed three payments and 6.8 over the 15 months of the pandemic % missed four or more payments. Overall, rental homeowners lost $ 7.10 billion in revenue in the second quarter to missed rental payments. That was a decrease of $ 7.48 billion in the first quarter of 2021.
On average, in the second quarter of 2021, 9.7% of tenants received permission from their landlord to defer or reduce their monthly rent payment (by one week).
“Most homeowners who are behind on their payments are on a mortgage forbearance plan,” said Edward Seiler, executive director of the Research Institute for Housing America and vice president of the MBA. “The employment situation and homeowners’ ability to make their mortgage payments has improved significantly since the pandemic began. For those still facing difficulties after their forbearance has expired, loan modifications, deferrals, and loan repayments – either through refinancing or a home sale – are all options that could prevent foreclosure. “
ThatHousing and Urban Development Department(SKIN),Ministry of Agriculture(USDA) andVeterans Affairs Department(VA) announced on July 23 that it would give homeowners options to reduce their monthly principal and interest by extending their mortgage term, bringing the agencies “closer to the options for homeowners with Fannie Mae and Freddie Mac-backed mortgages” be adjusted. it says in a press release from the White House.
For borrowers who can repay their mortgage, federal agencies will allow them to defer their payments until their mortgage ends. However, the White House said some homeowners would need “deeper assistance” to keep up to date and keep their homes.
“To ensure a stable and equitable recovery from the disruption of the COVID-19 pandemic and prepare homeowners to exit mortgage forbearance, the Biden-Harris administration is taking steps to keep Americans in their homes and a return to one more stable situation to support housing market, “the White House said in a statement.
The registration period for Forbearance ends at the end of September.
Homeowners were the least likely to miss a missed payment since Q2 2020, with 85.4% of mortgage borrowers making all their mortgage payments, 5.6% missing one payment, 1.9% missing two payments, 1.4% missing three Missed Payments and 5.7% missed four or more payments.
On average, in the second quarter of 2021, 15.5% of mortgage creditors received permission from their service providers to defer or reduce their monthly payment (weekly). Overall, total missed mortgage payments for the second quarter were estimated at approximately $ 10.8 billion – up from $ 12.2 billion in the first quarter.
The post More households paid their rent and mortgages first on HousingWire in the second quarter of 2021.
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