CHARLOTTE, N.C., May 20, 2020 /PRNewswire/ -- In the wake of
the COVID-19 pandemic, many homeowners questioned whether they'd be
able to pay their monthly mortgage payments. As a result, millions
of people requested a mortgage forbearance agreement, which
temporarily postpones or lowers a borrower's monthly mortgage
payment. Though forbearance can be a boon for homeowners struggling
to stay afloat, a new LendingTree survey conducted by Qualtrics
suggests that most people who received a forbearance may not have
necessarily needed one.
Key findings
- 25% of homeowners surveyed applied for forbearance due to a
coronavirus-related hardship.
- Of the 25% that applied, 80% were approved for a
forbearance.
- While the majority of people who applied were approved, only
5% said they wouldn't have been able to pay their mortgage without
forbearance.
-
- Another 26.2% of survey respondents said they could have paid
their mortgages if they had not received a forbearance, but would
have needed to skip other essential bills to do so.
- 72% of those who received forbearance reported feeling at
least a little guilty about it.
Those who applied for forbearance differed along gender,
generational and income divides
In general, women were less likely to apply for forbearance than
men, with 10.2% of women and 37.8% of men
surveyed applying because of the coronavirus pandemic. While men
were far more likely to apply than women, approval rates between
the genders were similar, with 75% of women
and 81% of men being approved.
Younger homeowners were more likely to apply for a forbearance
than older homeowners. About 36% of millennials
and 35.1% of Gen Xers applied for forbearance. This is
compared with just 3.5% of baby boomers. Of those who
applied, 76% of millennials, 87.6% of Gen Xers
and 76.9% of baby boomers were approved.
Homeowners in higher-income brackets were more likely to apply
and be approved for forbearance. One explanation may be that
lenders see higher-income earners as more likely to repay missed
payments later down the line.
Vast majority of respondents claimed they could have made
payments without forbearance
Five percent of homeowners who were approved for forbearance
said they would not have been able to make their mortgage payment
without it. Furthermore, 26.2% of survey respondents said they
could have paid their mortgages but would have needed to skip other
essential bills. And almost 70% said they could have made their
payments, but just wanted a break from their normal payments.
Of all the generations, millennials and Gen Xers were more
likely to say that they wanted a break from payments. Notably, 71%
of respondents from these age groups said they could have made
their payment but just wanted a pause. An average of only 4.3% of
millennials and Gen Xers said they would not have been able to pay
their mortgages without forbearance.
While fewer baby boomers applied for forbearance, as older
homeowners are more likely to own their homes outright or are
closer to paying off their mortgages, those who did were in much
greater need. In fact, 20% of baby boomers said they needed
forbearance to avoid missing their monthly payment.
Most who were granted forbearance felt some guilt about
it
Of those surveyed, 33.2% felt "a lot" of guilt about receiving
forbearance, while 38.3% felt "a little" guilty. Generally, women
were more likely to feel "not at all" guilty compared with men
(43.8% versus 25.2%), while 70% of baby boomers reported feeling no
guilt, compared to 30% of millennials and 20.4% of Gen
Xers.
For the full survey results and additional information,
please visit:
https://www.lendingtree.com/home/mortgage/majority-of-homeowners-approved-for-mortgage-forbearance-may-not-have-needed-one-study/
Methodology
LendingTree commissioned Qualtrics to
conduct an online survey of 1,305 homeowners. The survey was
fielded April 28-May 1, 2020.
Generations are defined as the following age ranges in 2020:
- Millennials are aged 24 to 39
- Gen Xers are aged 40 to 54
- Baby boomers are aged 55 to 74
While LendingTree's survey included homeowners who identified
themselves as being from Generation Z and the silent generation,
the sample sizes for both groups were so small that findings
related to each group were not included in this study.
About LendingTree
LendingTree (NASDAQ:
TREE) is the nation's leading online marketplace that connects
consumers with the choices they need to be confident in their
financial decisions. LendingTree empowers consumers to shop for
financial services the same way they would shop for airline tickets
or hotel stays, comparing multiple offers from a nationwide network
of over 500 partners in one simple search, and can choose the
option that best fits their financial needs. Services include
mortgage loans, refinances, auto loans, personal loans, business
loans, student refinances, credit cards and more. Through the My
LendingTree platform, consumers receive free credit scores, credit
monitoring, customized recommendations to improve credit health,
and notification when there are opportunities to save money. In
short, LendingTree's purpose is to help simplify financial
decisions for life's meaningful moments through choice, education
and support. LendingTree, LLC is a subsidiary of LendingTree, Inc.
For more information, go to www.lendingtree.com, dial 800-555-TREE,
like our Facebook page and/or follow us on Twitter
@LendingTree.
Contact:
Megan Greuling
704-577-3284
Megan.Greuling@tree.com
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SOURCE LendingTree.com