With the economic stress of the past two years, many people and families have struggled to make payments on their debts Unfortunately for lenders, this has meant that many fell behind on their mortgage payments and still have not brought those payments up to date. What should financial institutions know about the rate of unpaid mortgages in recent months?
While rates of delinquency have improved, there is still far to go.
Loan delinquency rates have improved significantly since their initial spike in spring of 2020. April of 2021 saw a 4.7 percent rate of overall delinquency, for example, which was a marked improvement when compared to the 6.1 percent rate of delinquency seen in April of 2020.
However, these rates are still high, especially compared to the rates of delinquency reported prior to the pandemic. a high rate of mortgages remain seriously delinquent. In fact, despite an overall decrease in the number of mortgages that are less than 90 days delinquent, mortgages with payments 90 days or more past due increased significantly during the first year of the pandemic. This increase took rates of serious delinquency from 1.2 percent in March of 2020 to 3.5 percent in March of 2021.
Why should lenders consider seeking legal guidance?
These lingering high rates of delinquency can be a significant challenge for lenders. Because the legal landscape has shifted in recent months to support borrowers, it can be particularly important to work with an experienced attorney when collecting on delinquent mortgages. The lawyer your financial institution hires can help you navigate any updates to regulations and support the future financial health of your company through the collections process.