Significant number of borrowers are unaware of relief options
Most Americans were still unfamiliar with either mortgage or rent relief options in the second quarter as the economic hardships of the pandemic ramped up, a Fannie Mae survey found.
The survey, conducted between April and June, found that 56% of Americans were not familiar with either their mortgage or rent relief options, while another 4% replied don't know.
For mortgage holders only, slightly more than half, 53% said they were familiar with options like the forbearance process. Furthermore, in this group there were knowledge disparities based on income differences and among different racial groups.
While 56% of white borrowers and 86% of Asians said they were familiar with the mortgage relief options being offered to those impacted by COVID-19, just 47% of Black borrowers and 31% of Hispanics surveyed replied they were familiar.
Meanwhile, of borrowers with a household income under $50,000 — one of the groups most likely to be economically impacted by the pandemic — just 39% were familiar with their relief options, versus 57% whose income is over that amount.
Among those in that lower income bucket, 52% expressed some level of concern about paying their monthly bills, while a third said they were concerned about losing their job.
However, 68% of those earning over $50,000 were not concerned at all about paying their monthly bills, and 81% were not concerned about losing their jobs.
Among all of the survey respondents, both borrowers and renters, 26% said they were concerned about losing their job, the highest level since March 2011.
Fannie Mae asked respondents about their attitudes towards shopping for a home and a mortgage online. The end of the process, the loan closing, has seen a huge burst in online activity as a result of the pandemic.
While consumers still prefer to interact with their lender in person during all or parts of the transaction, there was a shift in each month's results, leaning further toward a preference for online engagement at the end of the second quarter.
When it came to selecting a lender while buying a home, the split in preference went from 65% preferring in person and preferring 30% online in April's responses to 57% and 35% respectively in June.
Asked about completing a mortgage or rental application for their next home, the responses shifted from 59% preferring in-person and 37% online in April to 52% and 44% respectively in June.
"Consumer awareness campaigns and borrower and renter outreach should continue in order to help ensure those who suffer a financial hardship are aware of their options," Fannie Mae Chief Economist Doug Duncan said in a blog post accompanying the results. "The industry should continue to ramp up digitization efforts but not overestimate the pace of growth in demand for and usage of digital resources."