Above photo: Bank owned home from Getty images.
Delinquencies on home mortgages spiked by a record amount last month as the coronavirus pandemic’s economic fallout continued to explode and government programs began allowing payment delays without punishment.
Roughly 3.6 million homeowners were past due on their mortgage in April, a 1.6 million jump from March, according to data from Black Knight. The national delinquency rate nearly doubled to 6.45 percent from 3.06 percent, a record increase.
Nevada, New Jersey and New York led all 50 states in delinquency increases as each state saw a rise of roughly 5 percent from March.
The data also showed that 4.7 million borrowers were in forbearance as of May 12.
“The impact of COVID-19 on the housing and mortgage markets has already been substantial,” said Andy Walden, economist and director of market research at Black Knight. “It will be some months before we can gauge the full extent of that impact. Whatever the ultimate scope, it is almost certain the effects will resonate for many months to come.”
The coronavirus outbreak has buckled the U.S. economy, with social distancing orders leading to a string of business closures and layoffs. The unemployment rate has tripled to 14.7 percent, the highest since the Great Depression.
The federal government allowed borrowers negatively affected by the outbreak to defer certain mortgage payments for six months without any penalty under the $2.2 trillion stimulus package signed into law in March.