American Watchdog Says Black, Hispanic Owners More Likely To Be On Withdrawal Program
According to new data from the Consumer Financial Protection Bureau (CFPB), black and Hispanic US mortgage borrowers are much more likely to be in delinquency or in a “tolerance” program than white borrowers, underscoring just how bad the crisis is. COVID-19 is exacerbating systemic racial disparities, according to new data from the Consumer Financial Protection Bureau (CFPB).
In a pair of new reports released Tuesday analyzing 2020 mortgage complaints, the agency found that 33% of homeowners on mortgage vacations or “tolerance” programs and 27% of delinquent borrowers identify as black or Hispanic, while only 18% of the total mortgage borrower population identify as black or Hispanic.
The agency said mortgage complaints made up 5% of all its complaints since January 2020, but that in March 2021, however, it received “the highest volume of monthly mortgage complaints since. April 2018 ”.
The reports are part of a larger CFPB effort to implement President Joe Biden’s priorities to help Americans recover from the pandemic, promote fair housing and fight systemic racial injustice.
“More borrowers are behind on their mortgages than at any time since the height of the Great Recession,” said Dave Uejio, acting director of CFPB. “Communities of color have been hit hard by the pandemic, and the latest data shows that many borrowers are still suffering,” he added.
“The burdens of the crisis are not being equally borne, as the data shows,” said Melissa Stegman, senior policy advisor at the Center for Responsible Lending. “It is essential that racial equity remains at the heart of all COVID relief efforts.”
To help Americans overcome pandemic lockdowns, Congress last year gave many struggling homeowners the right to suspend mortgage payments and imposed a moratorium on foreclosures.
The CFPB also found that loans in default or default are more likely to present a disproportionate risk with limited equity, suggesting that minorities were already more vulnerable when entering the pandemic.
Between January 2020 and March 2021, consumers complained that mortgage managers – companies or banks that process mortgage payments – failed to provide clear and specific information about their options, including details about loss mitigation, until the end of the consumer abstention period, the agency found. .
Some borrowers found the opt-out process “confusing and incomplete”, complained of delays and in some cases were denied loan modifications, the CFPB said.
Reuters reported last month that the CFPB was cracking down on mortgage managers amid concerns that some might discriminate against minority borrowers. The agency is also concerned that millions of forbearers will be forced into foreclosure when forbearance programs expire this year.
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