The number of people unable to make house payments on time has reached a nine-year high, according to a recent analysis of the data.
Mortgage delinquencies were at 8.22 percent of all loans for the second quarter of 2020, says the Mortgage Bankers Association.
At the end of June, an estimated 4.2 million Americans were on a forbearance plan, meaning they have an agreement with their mortgage lender to delay foreclosure.
"The COVID-19 pandemic's effects on some homeowners' ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA's survey," said Marina Walsh, MBA's Vice President of Industry Analysis in a press release. "The second quarter results also mark the highest overall delinquency rate in nine years, and a survey-high delinquency rate for FHA loans."
FHA, or Federal Housing Administration, loans are designed for low-to-moderate income borrowers and require a smaller down payment when purchasing a home. The survey found 15.65 percent of FHA loans were delinquent in the second quarter of 2020. That’s the highest rate since the Mortgage Bankers Association began keeping records in 1979.
The survey asks loan servicers to report any loan that is not paid back according to the terms in the agreement.
The high rate of mortgage delinquencies appear to be connected with availability of jobs. The five states with the largest increases in delinquency rate were New Jersey, Nevada, New York, Florida and Hawaii; all states with a high number of leisure and hospitality jobs that are now in flux because of the COVID-19 pandemic.