What Happens during Mortgage Forbearance?

Andrew Haughwout, Donghoon Lee, Joelle Scally and Wilbert van der Klaauw

No 20210519b, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: As we discussed in our previous post, millions of mortgage borrowers have entered forbearance since the beginning of the pandemic, and more than 2 million remain in a program as of March 2021. In this post, we use our Consumer Credit Panel (CCP) data to examine borrower behavior while in forbearance. The credit bureau data are ideal for this purpose because they allow us to follow borrowers over time, and to connect developments on the mortgage with those on other credit products. We find that forbearance results in reduced mortgage delinquencies and is associated with increased paydown of other debts, suggesting that these programs have significantly improved the financial positions of the borrowers who received them.

Keywords: mortgage forbearance; credit cards (search for similar items in EconPapers)
JEL-codes: D14 (search for similar items in EconPapers)
Date: 2021-05-19
New Economics Papers: this item is included in nep-ban and nep-ure
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