Giving Compass' Take:
- As homeowners approach a chaotic spring, Urban Institute lists three concerns for policymakers to prioritize in addressing housing issues during COVID-19.
- How might current policies neglect homeowners in marginalized communities? What can we do to draw attention to concerns over equity and other housing issues during COVID-19?
- Read further about strategies for enhancing mobility in housing policy during the pandemic.
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Although millions of homeowners have recovered financially and resumed their mortgage payments, concerning trends in the housing market prevail. As of November 2020, 3.7 million homeowners who had entered forbearance since the pandemic began had exited forbearance. But 3.2 million homeowners continue to struggle, including 2.8 million homeowners who remain in active forbearance and 369,000 homeowners who are delinquent on their mortgage payments and are not in active forbearance. Many of those in active forbearance have reached their sixth month in forbearance, requiring them to either exit forbearance or ask their servicers for an extension.
At a recent webinar, Urban Institute researchers presented evidence of a sizable number of households who are delinquent on their mortgage payments without pursuing loss mitigation, a lack of homeowner awareness of repayment options, and stark disparities in housing payment status by race, ethnicity, and income. Following the presentation, leading housing experts identified three priorities for policymakers, mortgage servicers, and financial institutions to help struggling homeowners.
1. Reach the 369,000 borrowers who are delinquent but are not in forbearance
The number of homeowners coming out of forbearance and falling delinquent again will likely grow when the one-year forbearance period ends in the spring.
2. Prepare for homeowners to exit forbearance this spring
Borrowers who continued to make mortgage payments during the forbearance period and those with government-sponsored enterprise loans were more likely to exit forbearance after the six-month period.
3. Address inequalities across race, ethnicity, and income
Data show that households of color and those with lower incomes are more likely to fall behind on their housing payments. Pepper and Rice noted that the racial, ethnic, and economic inequalities that existed before COVID-19 could worsen as the pandemic continues.
Read the full article about addressing housing issues during COVID-19 by Jung Hyun Choi and Daniel Pang at Urban Institute.