Delinquency of 90 days or more in mortgage loan payments has been reduced by 10% and delinquency between 30 and 60 days is in a normal state, similar figures with the numbers prior to COVID-19 and Hurricane María, according to the Puerto Rico Banks Association (ABPR) and the Mortgage Banking Association (MBA).
Pedro “Peter” Torres, MBA president, indicated that “crime has been decreasing considerably, as have requests for moratoriums”.
According to Zoimé Álvarez Rubio, executive vice president of the Puerto Rico Banking Association, during the month of March mortgage defaults reached 106,586, for an amount of $ 11,800 million.
He added that in Puerto Rico, as a result of federal aid, many people receiving moratoriums decided to update the arrears or establish payment plans.
Once the moratorium expires, the client must bring the mortgage up to date and in the event that the loan is part of the bank’s portfolio – for which it belongs to the financial institution – the debt is paid at the end.
As indicated, at the end of the moratorium period, the banks will analyze the payment capacity of the clients and will offer them the available alternatives, which depend on each particular case.
Prohibition of evictions
Despite the positive mortgage numbers, there is concern among mortgage owners who must continue with the monthly liability at a time when the federal government just made a new extension to the prohibition of evictions of tenants who cannot pay the rental of their residences.
“These moratoriums are for the main residences, so many owners of rental housing cannot take advantage of the aid that their tenants can with this order that avoids taking people out onto the street. This is the eternal problem that many do not understand. Many of the owners of these properties owe and live on this income and if the property is paid off, many also depend on that money for their expenses. What must be done is to reach an agreement between the lessor and the tenant ”, explained Torres.
For his part, Álvarez Rubio said that the new extension to the ban on evictions arises from an executive order from the President of the United States Joseph Biden, which they have to comply with in the case of housing with federal aid.
“Another type of private investor is not obliged to follow the executive order, although Fannie Mae and Freddie Mac have already availed themselves of the moratorium. Now consumers have until June 30 to avail themselves of it if necessary, because they are affected by the pandemic, but they have to request it, it is not automatic, “said Álvarez.
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