WASHINGTON—A new Mortgage Bankers Association report says pandemic-era mortgage forbearance helped most borrowers avoid foreclosure, but a sizable group of more financially vulnerable homeowners still needed additional support from the federal Homeowner Assistance Fund after those initial relief measures ended.
The new study from the Mortgage Bankers Association’s Research Institute for Housing America said more than 80% of borrowers who entered forbearance during the early stages of the COVID-19 crisis had exited by the end of 2021 and either resumed payments or paid off their loans. But the report said some homeowners remained under financial strain and turned to the $10-billion Homeowner Assistance Fund (HAF), a federal program launched in 2021 to help borrowers affected by the pandemic.
According to the report, HAF was used primarily to help cover past-due or future mortgage payments, but it also supported other housing-related costs such as property taxes and utilities. MBA said more than 90% of HAF dollars nationwide went to homeowners with incomes below the area median, and recipients were concentrated in communities that experienced higher unemployment and mortgage delinquency during the pandemic.
The report also found HAF reached borrowers who may have fallen outside traditional mortgage relief channels. In Ohio, for example, more than one in 10 of the roughly 100,000 homeowners who later received assistance for missed mortgage payments got HAF in addition to or instead of forbearance, while about one-third of Ohio HAF recipients had no evidence of a mortgage on their credit file—suggesting the program also helped borrowers with non-traditional housing finance arrangements or other housing-related obligations.