The number of individuals who are at least three months behind on their mortgages has increased by 250% in the past year, and 11 million renters and homeowners are at risk of losing their homes to foreclosure or eviction, according to a report issued by the Consumer Financial Protection Bureau this week. Collectively, almost $90 billion in mortgage payments have been missed in the past year and communities of color are disproportionately in trouble, according to the report.
For the ARM industry, that could represent $90 billion in payments on unpaid debts that are not paid, once individuals have to start making their mortgage or rent payments again. Many loans have been placed into forbearance during the COVID-19 crisis, but those forbearance plans will not last forever and will likely be coming to an end sooner rather than later. The 2.1 million individuals who are at least 90 days past due on their mortgage payments are expected to be immediately thrown into financial trouble once their forbearance plans end.
“We have very little time to prevent millions of families from losing their homes to eviction and foreclosure,” said CFPB Acting Director Dave Uejio in a statement. “At the CFPB, we are working hard to help homeowners and renters as the U.S. begins to turn a painful crisis, caused by the pandemic, into a robust recovery. We know small landlords are struggling, too, with many dipping into savings or using credit cards to make it through the pandemic. We want everyone — homeowners and renters, landlords, and mortgage servicers — to have the tools they need now to avoid unnecessary evictions and foreclosures.”
Homeowners do have one thing going for them — increases in house prices across the country have increased the amount of equity that individuals have in their home, which may be tapped in to for an emergency or provide more of a cushion should a sale be necessary.
