After Forbearance: A Return to Normalcy

As a mortgage provider, you may find yourself working with customers who have exited mortgage forbearance and are facing difficulties paying back what they owe, especially during the past year.

As a result of the COVID-19 pandemic, total outstanding U.S. consumer debt skyrocketed $800 billion, reaching around $14.9 trillion in total in 2020. It’s also estimated that the average American has $90,460 in debt. This includes all types, from credit cards and personal loans to student loans and mortgages.

A Credit Karma survey of more than 1,000 homeowners in forbearance in April 2021 found that 31% used the extra funds for groceries, medical costs, and pandemic-related expenses like homeschooling supplies, and 32% saved the extra money by putting it into an emergency fund or savings account.

When it comes to COVID-19-related forbearances specifically, 591,000 of the 5.7 million homeowners who have exited the program were delinquent on payments as of June 2021, a number that’s only expected to rise, as this figure is already three times the pre-pandemic rate.

This article originally appeared on DS News. Read the full article here.