Under 10% of Renters and Homeowners Missed More Than 2 Payments During the Pandemic

It turns out most renters and homeowners haven't fallen so delinquent on their housing payments.

Millions of Americans found themselves out of work once the coronavirus pandemic took hold, which meant that paying their bills suddenly became difficult. To help those in need, relief was made available to prevent both tenants and homeowners from being thrown out on the street due to not having the means to pay rent or cover their mortgages.

For renters, an eviction ban was put into place that's set to expire in June. For homeowners, mortgage forbearance has allowed home loan payments to be paused for up to 18 months.

But new data from the Mortgage Bankers Association's (MBA) Research Institute for Housing America reveals that while Americans have needed a fair amount of housing relief over the past year and change, they've also managed to keep up with their payments to a greater extent than expected. In fact, over the course of the whole pandemic, only 8.6% of renters and 6.8% of homeowners missed more than two housing payments.

Of course, the percentage of those who missed a single payment is greater. An estimated 23.7% of renters and 14.2% of homeowners fell behind at least once since March of 2020. But all told, the numbers may not be as dire as anticipated.

Playing catch up

The fact that renters and homeowners got housing relief during the pandemic is a good thing, but that aid is soon coming to an end. Once the eviction ban is lifted, renters will generally need to get current on their missed payments or risk being forced to leave their homes. On a positive note, there's $45 billion in rental assistance available to those in need, and once states get a better handle on distributing that money, a lot of renters may be in a better position to get caught up.

Homeowners, too, have some options. Those who put their mortgages into forbearance early on in the pandemic will see that option run out in the fall when their 18 months are up. But that doesn't mean loan servicers won't work with homeowners who can't make good on their payments right away. In fact, loan servicers are already being urged by the Consumer Financial Protection Bureau to help borrowers stay in their homes once forbearance comes to an end -- namely, by agreeing to let borrowers modify the terms of their mortgages so they're easier to pay off.

Mortgage loan servicers also cannot require homeowners who put their loans into forbearance to catch up on what could be 18 months of payments in one lump sum. Rather, borrowers must be given a reasonable method for catching up. For the most part, that will generally involve extending the length of a mortgage's repayment period. For example, if a borrower has 20 years left on a mortgage but put that loan into forbearance for 18 months, that borrower's repayment term would simply get extended to 21.5 years.

All told, renters and homeowners alike may have to catch up on some missed payments, but the fact that the majority didn't miss more than two payments puts them in a better position to do so. And if loan servicers and landlords are willing to be flexible, it'll create a scenario where more people can recover from the pandemic without needless struggle.