{"title":"Inequality in the Time of COVID-19: Evidence from Mortgage Delinquency and Forbearance","authors":"Xudong An, Larry Cordell, Liang Geng, Keyoung Lee","doi":"10.2139/ssrn.3789349","DOIUrl":null,"url":null,"abstract":"Using a novel database that combines mortgage servicing records, credit-bureau data and loan application information, we show that lower-income and minority borrowers have significantly higher nonpayment rates during the COVID-19 pandemic, even after controlling for conventional risk factors. A difference-in-differences analysis shows how much the pandemic has exacerbated income and racial inequalities. We then find that government and private-sector forbearance programs have mitigated these inequalities in the near term, as lower-income and minority borrowers have taken up the short-term debt relief at higher rates. Finally, we examine modification options for an estimated 2.8 million loans in forbearance, most with terms expiring by mid-year 2021.","PeriodicalId":196465,"journal":{"name":"ERN: Wages; Intergenerational Income Distribution (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"42","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Wages; Intergenerational Income Distribution (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.3789349","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 42
Abstract
Using a novel database that combines mortgage servicing records, credit-bureau data and loan application information, we show that lower-income and minority borrowers have significantly higher nonpayment rates during the COVID-19 pandemic, even after controlling for conventional risk factors. A difference-in-differences analysis shows how much the pandemic has exacerbated income and racial inequalities. We then find that government and private-sector forbearance programs have mitigated these inequalities in the near term, as lower-income and minority borrowers have taken up the short-term debt relief at higher rates. Finally, we examine modification options for an estimated 2.8 million loans in forbearance, most with terms expiring by mid-year 2021.