A new survey from Bankrate found that 34% of mortgage borrowers didn’t know communication financial hardship was an option and 60% have not contacted their lender.
However, nearly half of all borrowers are not worried about their next payment. The results found 45% of those polled said they are not concerned about making their next payment, while 55% have some level of concern.
Greg McBride, Bankrate’s Chief Financial Analyst, said this “say-nothing” approach is the wrong one to take.
“For households struggling financially due to the pandemic, payment relief is available—but you have to ask for it,” McBride said. “Make this a top priority. Forbearance can ease the strain of what may well be two of the biggest components of the household budget.”
More than 30 million Americans have lost their jobs due to COVID-19 and the U.S. economy contracted 4.8% in Q1 2020.
Of those borrowers who reached out for help to make mortgage payments, 17% said they received relief while 15% said they were not able to receive payment relief.
The report also said 43% of baby boomers (ages 56-74) were concerned about making payments, which was followed by Generation X (56%); millennials (65%), and 79% of households aged 30 or younger.
As of April 30, more than 3.8 million homeowners are now in forbearance plans, representing 7.3% of all active mortgages, according to the latest data from Black Knight. Together, they account for $841 billion in unpaid principal and included 6.1% of all GSE-backed loans and 10.5% of all FHA/VA loans.
This is an increase from Black Knights April 24 data, when more than 3.4 million homeowners, or 6.4% of all mortgages, have entered into COVID-19 mortgage forbearance plans.
According to Black Knight CEO Anthony Jabbour, the recent Federal Housing Finance Agency (FHFA) announcement of a four-month limit on advance obligations for servicers of mortgages backed by Fannie Mae and Freddie Mac provides the industry with some much-needed clarity.
“Having a four-month end date on the period in which servicers need to advance principal and interest payments on behalf of homeowners in forbearance is extremely helpful to our servicing clients,” said Jabbour. “Still, even knowing that time limit, with today’s number of forbearance plans, servicers are still looking at more than $7 billion dollars in advances over those four months. And the forbearance numbers are climbing steadily, day by day. Clearly, this remains a challenging situation all around.”