Bloomberg writer John Gittelsohn reported recently that, “Delinquencies on U.S. home loans surged by 1.6 million in April, the biggest one-month gain ever, after the government cleared the way for Americans who lost income in the pandemic to delay payments without penalty.
“Mortgages at least 30 days in arrears almost doubled to 6.45%, the highest rate since January 2015, according to data compiled by Black Knight Inc. About 3.4 million loans were more than 30 days late and an additional 211,000 properties were in foreclosure or on track for repossession by lenders.
“A federal relief program allows borrowers impacted by the virus an initial six-month payment deferral without penalty. About 4.7 million borrowers were in forbearance as of May 12, according to Black Knight.”
The Bloomberg article added that, “‘While April saw a record single-month increase in the national delinquency rate, the data shows that the vast majority of new delinquencies represent borrowers who are currently in COVID-19-related forbearance programs,’ said Andy Walden, economist and director of market research at Black Knight.
“The pace of delinquency increases is unprecedented but it’s still uncertain whether the volume of problem loans will return to the levels they reached after the last decade’s foreclosure crisis. About 7.9 million mortgages were noncurrent in January 2010, according to Black Knight.”
