Housing Protections Expires, Americans Can’t Afford Housing Payments
Protections were put in place early in the COVID-19 pandemic to help homeowners and tenants who were unable to pay their mortgages and rents. Up to 18 months could be paused by homeowners on mortgage payments under the forbearance program. Tenants who lost their jobs or were facing financial hardship were also protected by eviction bans.
However, according to fool, these protections have largely expired at this point. While mortgage borrowers with some time left on the forbearance clock may still have some time left, those who paused their loan payments during the COVID-19 crisis have likely passed this point.
Moreover, the federal ban on eviction has been lifted. Though some cities and states have provided their own protections, most tenants are now required to pay their landlords in full or risk losing their apartments.
There were several missed housing payments in October, according to new data. According to the Mortgage Bankers Association, 5.43 million households missed their rent or mortgage payments that month. The proportion of households that missed a payment in September was only 4.71 million.
In October, 3.8% of homeowners failed to make their mortgage payments, up from 3.2% in September. In October, 10.9% of renters missed, delayed, or reduced their rent payments compared to the 9.6% fraction in September.
This Situation was Made Worse by Inflation
The pandemic has left many households unable to recover financially. Due to the lack of forbearance and eviction bans, it’s not surprising to see missed housing payments rise. Moreso, recent inflation has compounded the situation. Due to this, many households have had to spend more on food and groceries, which means they have less money to pay their rent.
If you are unable to cover your housing payments, there are still options available, even without federal assistance. Mortgages can be modified by homeowners by contacting their loan servicers. Loan modifications generally involve extending a mortgage, which lowers the monthly payments.
Those who are having trouble paying their mortgages can refinance their loans. Refinancing, however, normally requires a decent credit score, and those whose credit has been hit hard may have experienced a dip in their credit score.
Those who rent their apartments can also try to negotiate a reduced rent with their landlords or extend their payment plans. Despite landlords being able to evict tenants on the basis of non-payment (outside of areas with extended protections), the process of doing so can be lengthy, and costly. You may be able to work out a deal with some landlords by just giving it a try.
In the future, households might miss fewer payments as the economy improves. However, the situation may get worse in this regard before it gets better because protections have just expired.