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COVID-19

Mortgage forbearance numbers up due to COVID-19

Amy Scott Apr 14, 2020
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Justin Sullivan / Getty Images
COVID-19

Mortgage forbearance numbers up due to COVID-19

Amy Scott Apr 14, 2020
Justin Sullivan / Getty Images
HTML EMBED:
COPY

More Americans are putting their mortgage payments on hold. According to a new survey from the Mortgage Bankers Association, about two million loans were in what’s called “forbearance” the first week of April, meaning borrowers have asked for a temporary break on the payment due.

The emergency aid package Congress passed last month allows many homeowners to delay their mortgage payments for up to a year. As job losses grow, more Americans are requesting that option.

The Mortgage Bankers Association says about 3.7% of home loans were in forbearance as of April 5, up one percentage point from the week before.

The association’s chief economist Mike Fratantoni expects that number to grow at a “rapid pace.”

“This is putting a real strain on some mortgage servicers,” he said.

Servicers are the companies that collect loan payments from borrowers, and they still have to pay the investors who own securities backed by those mortgages. The industry is asking the Federal Reserve for emergency loans to help cover those payments.

There was a speck of good news in the survey: Average hold times for homeowners calling to get relief fell from 13 minutes to just over 10 minutes.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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