Most borrowers who had mortgage waivers in March 2021, including disproportionately affected borrowers of color, were either on or off by March 2023. This is according to data released this week consumer financial protection bureau (CFPB) Office of Research.
Thank you for reading this post, don't forget to subscribe!Shortly after the start of the COVID-19 coronavirus pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in March 2020, allowed millions of American mortgage borrowers to enter public or private forbearance programs, which temporarily paid off their mortgages. Payment stopped. ,
Recent data from the National Mortgage Database compares the performance of mortgage borrowers in March 2023 to those in March 2021 for borrowers who had COVID-related forbearance, were delinquent but not in forbearance, and who were considered current on their payments. Over the past two years, the CFPB has been vocal about its concerns regarding tolerance recovery, but the data shows generally positive results.
“While we expressed concern about the ability of borrowers to recover from the forbearance period in both 2021 and 2022, our most recent analysis shows that most borrowers in 2021 – including Black and Hispanic borrowers – will largely reduce their Were able to get started on credit. Payment by March 2023, ”said the report.
In 2021, the CFPB found that mortgage delinquencies were most common among black or Hispanic borrowers; loans with a loan-to-value ratio of 60% or more; borrowers living in majority-minority census areas; and borrowers living in census areas with low relative incomes.
,[M]The CFPB found that loans that were past due in March 2021 fared much better than loans that were 60 days or more past due in March 2021. “However, their performance is marginally worse than that of loans that were current in March 2021. Loans that were foreclosed in March 2021 were also less likely to be closed by March 2023, compared to loans that were outstanding or current in March 2021.”
Of loans foreclosed in March 2021, more than 52% were current as of March 2023, a larger share compared to 26% of loans that were 60 days or more past due two years ago. In general, the positive results are clear, the bureau said.
,[T]Most borrowers, including black and Hispanic borrowers, who had mortgage forgiveness in March 2021 were current through March 2023,” the data said. “We also showed that borrowers who were 60 days or more delinquent in March 2021 were much less likely to be delinquent or foreclosed on in March 2021 than borrowers who were 60 days or more delinquent.”
Related research on the forbearance of the CARES Act has shown that most borrowers are turned on by either self-treating or assisted treatment, which includes entering into a repayment plan, moratorium or loan modification.
“The CFPB will continue to monitor how mortgage borrowers are performing as the economic recovery from the COVID-19 pandemic progresses,” the report said.
