COVID: 1.6 million missed mortgage payments (including COVID Forbearance), Delinquency Rates have doubled.
Based on recent data by Black Knight, Mortgage delinquencies surged by 1.6 million in April. This represents the largest single increase in Black Knight’s history. This number includes individuals who are in a COVID forbearance and covers all missed mortgage payments. As part of our work helping consumers with COVID debt relief, a number of folks are asking what the benefits of a COVID forbearance are.
Basically, a COVID forbearance plan allows you to miss three mortgage payments. These payments will generally become due in month four – in addition to the regularly scheduled mortgage payment. Imagine your monthly mortgage payment is $1,000 per month. Under a typical COVID forbearance, you can miss three months of mortgage payments with no late fees and no additional interest. In month four, your normal $1,000 payment is still due, plus the additional $3,000 you have missed under your COVID forbearance.
This is troubling, because the statistics are showing (at least for the past two weeks as of the date of writing – May 22, 2020) over 200,000 Florida unemployment claims in the state. Imagine then, the time that it will take for those unemployed to find new jobs. For those that are unemployed, a COVID forbearance essentially becomes a race for the consumer. You have to essentially find a new job, save up your $4000, and make your 4 mortgage payments. This is a very hard race to win as the economy reopens.
General Deliquency Rates are up to 6.45%, their highest since 2008.
This general deliquency rate is alarming. This includes all debts – credit cards, personal loans, payday loans, etc., that are in default status because of COVID. A COVID default has staggering impact because consumer debt has soared to 14.3 trillion dollars – it is now higher then it was in 2008. In general, credit cards are trying to work with consumers, accepting minimum payments, interest only payments, etc. This is problematic, because, if you are in a race to pay a COVID forbearance, on top of credit card debt, you may find that there is simply too much to pay back.
If you are on a COVID Forbearance or a forbearance with your Credit Card company and can’t make your payment all at once – you may have options.
For close to a decade, our firm has been helping consumers modify their loans, pursue short sales, file bankruptcy or negotiate debt, and seek recovery from banks for blunders related to the way they are collecting debts. This has not changed. If you have a COVID Forbearance through your mortgage lender or a credit card company, or are thinking of accepting one, you may have options. You can feel free to contact my office via phone at 813.252.0239, you can e-mail us, or you can schedule a time to speak with us online.