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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

What does the unemployment picture look like?

It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.

Will it work to fine people who refuse to wear a mask?

Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.

How are restaurants recovering?

Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.

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