Roughly 2 million homeowners in the United States have skipped their monthly mortgage payments as the coronavirus pandemic takes a heavy economic toll on the country, according to data from the Mortgage Bankers Association.
As more Americans are losing their jobs, being furloughed, or experiencing reduced income, a growing number of home loans are being left unpaid. The latest data from the Mortgage Bankers Association shows that many borrowers are choosing to go into forbearance, an agreement with a lender that allows them to momentarily forgo payments.
Around 3.74% of home loans have gone into forbearance as of April 5, according to The Wall Street Journal. This statistic is up roughly 2.73% from the previous week.
The number of borrowers opting to skip their monthly payments is only expected to get larger.
“[T]he number of borrowers asking for forbearance will likely continue to rise at a rapid pace,” Mike Fratantoni, the chief economist for the Mortgage Bankers Association, told TheWSJ.
The Mortgage Bankers Association, which represents nonbank companies like Freedom Mortgage Corp. and Quicken Loans Inc., serves as a type of intermediary for borrowers who make monthly payments for their home and the lenders who receive the payments. The group’s polling data reflects a sample size of around 27 million loans.
President Donald Trump signed a $2.2 trillion relief package in late March. The stimulus provides $1,200 to every single adult in the United States who makes less than $75,000, and provides forgivable loans of up to $10 million to every small business in the country.
However, the relief package does not provide assistance to mortgage services, which could pose a major problem if this trend continues. These companies say they might have to locate tens of billions of dollars to meet payroll with their investors if more homeowners quit making their mortgage payments.
More than 547,000 people across the country have tested positive for COVID-19 since the crisis began. Of those who have tested positive, more than 21,600 have died from the virus.
The rapid spread has prompted states to go under lockdown, forcing businesses to shut down. The result has been more than 6 million Americans filing for unemployment.
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