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Some are suffering to pay their mortgages amid the coronavirus pandemic as the resulting recession continues to hit the hard labor market, according to a Monday report by the Mortgage Bankers Association.
Overall loan delinquency increased by 8.22% seasonally adjusted at the time of the quarter, according to the MBA.That marked a five-year high and an increase of about 4% since the last quarter, the biggest quarterly jump in survey history.
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Some homeowners have been affected than others, according to the report. The FHA mortgage default rate, which is reserved for home ownership and used by many minorities and low-income Americans, rose to nearly 16% in the last quarter, a record..
Currently, the maximum homeowners who are suffering to repay their loan are foreclosures through the federal abstention program, which allows them to defer bills for one year without penalty due to the coronavirus pandemic. In early August, President Donald Trump signed an executive order extending the federal moratorium on deportations and seizures amid the pandemic.
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The states with the largest increases in non-borrowing rates were New Jersey, Nevada, New York, Florida, and Hawaii, all states with a number of recreational and hotel jobs, the sector most affected by the pandemic, according to the MBA.
“Some homeowners, especially those with FHA loans, will continue to be affected by this crisis, and bad debt is very likely to remain at the highest levels for the foreseeable future,” Walsh said.
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