Politics

Swing states with the best and lowest coronavirus mortgage bailouts

People will be standing to vote on November 3, 2020 at the Desert Breeze Community Center in Las Vegas, Nevada.

Ethan Miller | Getty Images

Just over 3 million homeowners last week delayed their monthly mortgage payments as part of indulgence plans that started at the start of the coronavirus pandemic.

The bulk of these are government mortgage bailouts. The rest are banking and private label programs. That’s 5.7% of all active mortgages, according to Black Knight, a mortgage data and technology company.

However, in some states, a higher proportion of borrowers are in trouble, which is likely due to higher unemployment related to Covid. While voters line up on election day, some of them may make decisions based on their financial health.

In Florida, Nevada, and Texas, a relatively larger proportion – 7% to 8% of borrowers – delay their monthly payments as part of these bailouts. In Georgia, just under 7% are in mortgage bailouts. All of these states see stocks that are above the national average.

Workers in Florida and Nevada are disproportionately affected by the pandemic because their economies are based on entertainment and hospitality. Texas has been hit by the massive drop in oil prices, also due to the pandemic.

“What we saw in the data is that areas of the country hardest hit by Covid-19 – although not necessarily those with the most cases per capita – had the highest proportion of homeowners in need of financial assistance,” said Andy Walden, Black Knight economist and director of market research.

“States like Hawaii, Nevada, Illinois, New York, Texas, and Florida saw the largest increases in unemployment rates and also had the highest percentage of their homeowners who have forbearance plans,” he said.

In Arizona, Pennsylvania, Wisconsin, Ohio, Iowa, and Michigan, the proportion is in the range of 4%, below the national average. North Carolina averages 5%.

The rescue programs allow borrowers to delay their payments for up to a year in three-month increments. About 80% of all bailout borrowers have been extended beyond the first three months.

Last week there was a surge in new forbearance plans, as well as some borrowers who fell back into forbearance after updating their home loans. However, the numbers have dropped significantly since the pandemic began.

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