Philly Fed Survey Finds 10% of Respondents Took COVID-19 Forbearance

More than 10% of respondents in a recent Federal Reserve Bank of Philadelphia survey said they had entered mortgage forbearance at some point during the pandemic, with 6.4% currently in a forbearance plan and 4.1% reporting they had previously been in forbearance since March 1, 2020. Borrowers that were employed by pandemic-affected industries were more likely to report that they used forbearance—75% of borrowers currently in forbearance reported experiencing a negative employment shock, as did 71% of borrowers who used forbearance previously.

One-quarter of respondents in leisure, hospitality, arts and entertainment said that they either had been or were currently in forbearance, the Fed found, which was consistent with the significant job losses seen by that sector. In addition, 18% of both construction and retail sales employees took a forbearance option during the pandemic, and most construction workers were still under a forbearance plan at the time of the survey.

For borrowers who did not use forbearance, the vast majority—83%—said it was because they did not need it. Five percent cited confusion about how forbearance plans worked and whether they would qualify, while 4.6% percent said they worried that forbearance would be costly and 4.2% said they were concerned about making up payments.