By Irina Ivanova
The number of Americans struggling to pay their mortgages has skyrocketed as the economy reels from the coronavirus pandemic, with nearly 3 million Americans behind by at least one month on their mortgage payments in the week ending April 12, according to the Mortgage Bankers Association.
Nearly 6% of all mortgages were in forbearance, the industry term for being behind on payments. The week before, 3.7% of home loans were past due by at least a month. The first week of March, just 0.25% of such loans were past due by a month.
This high a figure on a nationwide level is unprecedented, said Mike Fratantoni, MBA’s chief economist.
“You might have seen this high of a share in Houston after Hurricane Harvey, but it was always a local phenomenon,” he said. “What’s different this time is it’s national. To have 6% of mortgage loans in forbearance, that’s about 3 million homeowners saying they can’t make their mortgage payments due to COVID-19.”
Fratantoni expects that number to keep rising, citing an additional 1.8% of homeowners who called banks to request forbearance last week.
“As we get to the time when May payments are due, I expect to see those numbers going up again,” he said. “We are hopeful that, now that some of the stimulus payments are arriving and unemployment benefits are expanded, that can provide some cushion to keep these numbers from going higher too fast.”
Categories: Economics/Class Relations