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According to the report by Black Knight real estate data service, the delinquency rate on mortgages increased to 7.76 percent from May. the state of Mississippi had the worst delinquency rate, at 12.73%, followed by Louisiana at 11.79%.

These numbers should not comes as a surprise since the COVID-19 pandemic has caused states’s economies to shutdown and leave many without their main source of income. The Coronavirus Aid, Relief and Economic Security (CARES) legislation recommended lenders to allow mortgage forbearance to borrowers force out of work by the pandemic polices by governors and mayors. How does this impact homebuyers shopping for a home?

Forbearance and Delinquency
As mentioned Lenders and loan servicers in every state are encourages to offer mortgage forbearance by the CARES Act. All mortgage loans backed by the federal government are eligible for this temporary stoppage in payments for six months or longer.

However, interest still builds up during this pause, so the full loan amount owed will not decrease because of forbearance. These steps help borrowers keep the normal action for non-payment such as reporting late payments to the credit bureaus and legal action to take the property back. Nevertheless, these measures do not keep home loans out of the delinquent column when it involves reporting to the Mortgage Broker Association.

Virginia
Owners in Virginia behind on their mortgage payments is very low at one in every five compared to the national numbers. This does not, nevertheless, give the complete picture.

According to the Central Virginian newspaper on July 6th, a Rent and Mortgage Relief Program (RMRP) was launched on July 15th. It is a partnership with the Virginia Department of Housing and Community Development to help keep 1,000 more than families in their homes within the region, which includes the City of Charlottesville and adjacent cities.

California
California’s delinquency rate, 4.05 percent, was nearly twice as high as last year at the same time. According to the OC Register, as of July 7, 10% of L.A.-O.C. homeowners with a mortgage said they did not make May’s mortgage payment, an improvement from 12% at the end of April.

In the Inland Empire, 22% said they were recently late vs. 14% in April. Across the nation, 13% of borrowers said they skipped the payment vs. 11% in April. A recent poll was taken and it reported that 9% of L.A.-O.C. borrowers worry about their next payment, 22% in I.E.

Sales across the six-county Southern California region jumped 43.5% from May, the largest increase ever from May to June in a data set that dates from 1988. Yet with unemployment soaring and the back and forth state economy shutdowns from Gov. Newsom, buyers with the financial wherewithal find themselves in multiple offer situations.

Real estate agents claim bidding wars are frequently common because buyers came back to a market with a low supply of homes for sale and 50-year low interest rates on mortgages. In Orange County, home sales increased 49% from May and fell 22.1% from a year earlier.

The median price rose 4.1% from a year earlier to $765,000 which is just $600 shy of the conforming loan limit in Orange County. Many figures indicate a slight drop in the out-of-work population, so mortgage servicers will stay tuned.

Idaho
Idaho separates itself in a positive way because it number one state with the lowest delinquency rate in the entire United States. At 4.40 percent, the state known for its potatoes has not suffered to the same extent as its neighboring states westward. Idaho’s unemployment is a comparatively low 8.9 percent, and just 4.29 percent of mortgages are late.

Arizona
Similar to other Mountain and Pacific time zone states, Arizona’s delinquency rate is less than the national average. Just 18.3% of adults in Arizona are not able to afford to pay their rent or mortgage which is much lower than the 25.3% of adults nationwide.

This brings up the question of will financing be available to buy a home this year? When defaults and foreclosures rise across the country, credit and lending guidelines tighten. However, the Federal Reserve has made it clear that it would keep liquidity at a high level.

Moreover, the U.S. Treasury has started buying debts it normally in past wouldn’t to protect against losses. This was implemented as a short term solution until the economy shows clear signals it is back on track.

Given all the possibilities of worst-case scenarios they have not appeared yet. Currently, interest rates are at decade lows and world economies have restarted, even if very slowly.

For those who’s income has remained stable during COVID-19, have excellent credit and financially safe, there might not ever be a better time to put in an offer to buy or refinance.

Send in a quick online application and see what comes about. You may be pleasantly surprised if you have strong credit, employment, assets, and income.