WBK Industry News - Federal Regulatory Developments

CFPB Publishes Brief on Characteristics of Mortgage Borrowers During the COVID-19 Pandemic

The CFPB Office of Research recently published a special issue brief detailing trends among borrowers in forbearance and delinquent on their mortgages since the onset of the COVID-19 pandemic.  The brief covers characteristics for three groups of borrowers with mortgage loans: those with loans in forbearance, those with loans that were 60-plus days delinquent, and those with loans that were current.  The CFPB’s primary findings for data reported through March 2021 included, among other things, that: (i) Black and Hispanic borrowers made up a “significantly larger” share of borrowers who were in forbearance or delinquent; (ii) the share of loans with a loan-to-value ratio above 60 percent was “significantly larger” for borrowers in forbearance or delinquent as compared to those who were current; (iii) factors related to payment difficulty (such as single-borrower status, 30-plus day delinquency status in February 2020, and non-mortgage financial distress) were associated with higher likelihoods of forbearance and delinquency; and (iv) tract-level characteristics were significant in the analysis, as well, with forbearance and delinquency “significantly more likely” in majority-minority census tracts and in tracts with lower relative income.

The brief further describes how a significant portion of mortgage borrowers still found themselves in forbearance or delinquency a year into the pandemic, and it highlights how the pandemic disproportionately impacted particular communities, noting the difficulties in recovery that remain ahead for such borrowers.