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More Than A Million Mortgagors Feel At Risk Of Eviction Or Foreclosure

Navi Persaud
Feb 08, 2021
A man at his desk sorting out his bills.

The Mortgage Banker Association and the Research Institute for Housing America conducted a study that found that five million households failed to make their rent or mortgage payments in December 2020, an improvement compared to Q2 2020. The report also revealed that 1.2 million mortgagors believe they are at risk of eviction, foreclosure or be forced to move in the next 30 days.

According to the MBA and RIHA, the percentage of homeowners and renters who missed their payments dipped compared to 2020's second quarter, however, 5% (2.62 million homeowners) missed their mortgage payment in December.

"Gradual improvements in the labor market and economy helped more renters and homeowners make their housing payments at the end of 2020. However, the COVID-19 pandemic continues to cause financial stress for millions of Americans, and particularly for those who rent and have student loan debt," said Gary V. Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. "Despite 5 million renters and homeowners not making their December payment, fewer believe they are at risk of eviction, a foreclosure, or would be forced to move in the next 30 days. This confidence is perhaps an indication that direct checks and enhanced unemployment benefits, rental assistance, mortgage forbearance programs, and a federal eviction moratorium have so far been effective in keeping people in their homes."

"A rapid rollout of vaccines will hopefully slow the virus and lead to a larger reopening of the economy later this year. This would help the labor market and give affected households the opportunity to get back to work, resume their housing and student debt payments, and pay back past-due amounts," added Engelhardt.

The report also states that out of mortgagors, renters and student loan borrowers, mortgagors were the least likely to miss a payment over the past three quarters.

"This study provided a real-time picture of households' ability to make their housing and student debt payments in 2020, as well as their confidence in the near-term future," said Edward Seiler, executive director, Research Institute for Housing America, and MBA's associate vice president, Housing Economics. "The distribution of several effective vaccines will hopefully slow the pandemic. In the meantime, providing targeted relief for those facing hardships until the 'new normal' will be key to preventing wider disruption to the housing market and overall economic recovery."

Click here to learn more from the report.

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