COVID-19 Mortgage Forbearance: Implications on the Housing Market

COVID-19 Mortgage Forbearance: Implications on the Housing Market 8 Pages Posted: 4 Jun 2020 Last revised: 5 Jun 2020 Agostino Capponi Columbia University David Aaron Rios Columbia University Date Written: June 4, 2020 Abstract Congress introduced mortgage forbearance into the CARES act signed into law on March 27, 2020.The act offers American homeowners mortgage forbearance until June 30, with a possible extension of 180 days. Our objective is to study the implications of this act on the housing market and prepayment rates, accounting for Federal Reserve intervention policies up to date, and to compare the outcome with the global 2007-2009 financial crisis. In this preliminary note, we give descriptive statistics of today’s mortgage markets in terms of outstanding notional and volume of delinquencies, along with their relation to current unemployment levels. Keywords: mortgage forbearance, foreclosures, house prices, CARES act JEL Classification: G0, G1, G2, G15, C52, I10 Suggested Citation: Capponi, Agostino and Rios, David Aaron, COVID-19 Mortgage Forbearance: Implications on the Housing Market (June 4, 2020). Available at SSRN: https://ssrn.com/abstract=3618776 or http://dx.doi.org/10.2139/ssrn.3618776 Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3618776