Late mortgage payments on the rise; experts explain what this means for housing market
When unemployment goes up, so does the number of people who can’t pay their bills on time. That’s exactly what the Mortgage Bankers Association (MBA) found in a recent survey on mortgage delinquencies, or 30 day late payments.
Obviously, the pandemic has something to do with this, but Louisiana was seeing this trend long before the outbreak, and lending manager, Josh Highnote, thinks it won’t get much better if there isn’t any help.
“From a standpoint of delinquencies across [the] state, there is going to be an increased growth in that until the federal government, one, passes the HEROES Act or other funding for the city itself,” said Highnote from Reliant Mortgage.
The CARES Act is in place now to help protect your credit scores despite late payments during the pandemic, but what about after the pandemic? Experts say these mortgage delinquencies may or may not affect the housing market. However, Highnote adds there are guidelines in place now to prevent a repeat of the 2008 housing market crash.
“Those guidelines have actually tightened up a bit more to where it is a bit more challenging to qualify for a mortgage,” he said.
Those guidelines include verifying you’re employed and have a credit score higher than 640 to get a loan.
If you already have a mortgage and want to avoid foreclosure, Pelican State Credit Union explains you might have options.
“We’re focused on helping our members weather the storm through unique solutions designed to help them,” said Shandra Williams, the member solutions manager with the local credit union.
Williams says those unique solutions may include extensions and skip-a-pays, but you must communicate with your bank first when times get tough.
“The thing is, we have to speak to our members,” she said. “We don’t just offer something without getting the full story.”
Of course, your mortgage experience may be different at every bank. However, something as simple as a phone call could save you from a foreclosure in the future.
The MBA notes that a mortgage forbearance, or a deferred payment, does count as a late payment in their survey. This is similar to the MBA’s data collection methods during a natural disaster.
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