A new report from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA) examines borrower outcomes following pandemic-era relief programs.
After the onset of the COVID-19 pandemic in 2020, many homeowners avoided foreclosure, supported by swift public- and private-sector actions that provided immediate mortgage relief. By the end of 2021, more than 80 percent of borrowers who entered forbearance had exited and resumed payments or paid off their loans. However, some homeowners continued to face financial challenges and turned to support from the Homeowner Assistance Fund (HAF).
“There has been a lot of attention to COVID-era mortgage forbearance policies that are now a permanent part of the loss mitigation waterfall for homeowners with federally backed mortgages,” Dr. Stephanie Moulton, professor and associate dean for faculty and research at the John Glenn College of Public Affairs at The Ohio State University, said. “This is the first study to examine the $10 billion HAF program and the homeowners who benefited. The insights from this report help us think about potential gaps in the loss mitigation waterfall and the types of homeowners who may benefit from targeted support when they experience a crisis.”
RIHA’s study examines the impact of the $10 billion federal Homeowner Assistance Fund, program launched in 2021 to support homeowners affected by the COVID-19 pandemic. The report provides analysis of the distribution and use of HAF assistance nationwide, differences in state implementation, and the characteristics of borrowers who received support.
“Pandemic-era housing policy interventions proved highly effective in stabilizing the mortgage market and helping the vast majority of homeowners avoid foreclosure during an unprecedented economic shock,” Edward Seiler, executive director, Research Institute for Housing America, and MBA’s associate vice president, housing economics. “The research highlights not only the success of broad-based relief efforts like forbearance, but also the critical role of targeted programs such as the Homeowner Assistance Fund in supporting more vulnerable borrowers. As we look ahead, these findings offer important lessons for how policymakers and industry stakeholders can respond to future economic disruptions while promoting sustainable homeownership.”
Among the key findings, the report revealed:
- HAF programs served vulnerable homeowners, with more than 90 percent of HAF funds nationwide distributed to homeowners with incomes below the area median.
- HAF beneficiaries were geographically concentrated in areas that were more distressed during the COVID-pandemic, as measured by higher rates of unemployment and higher rates of mortgage delinquency.
- While the majority of HAF funds were used to cover past due or future mortgage payments, HAF programs also assisted with a variety of non-mortgage homeowner expenses, such as utility payments and property taxes.
- In addition to traditional mortgages, HAF mortgage assistance helped with payments for non-traditional types of credit instruments securing a principal residence such as reverse mortgages, land contracts, or mortgages with complex titles.
MBA’s RIHA is a 501(c)(3) trust fund. Its primary focus is to encourage and assist the establishment of a broader-based knowledge of mortgage banking and real estate finance.