Mortgage protections expire soon, and distressed homeowners need to be ready

September 10, 2020

Nearly one in 10 Long Island homeowners have fallen behind on their mortgages, and housing advocates and attorneys are urging them to seek help before the situation gets worse.

More than 60,000 Long Island homeowners had missed at least one mortgage payment by July  — a nearly threefold increase from a year earlier, according to figures provided to Newsday by Black Knight Inc., a mortgage industry technology and data provider. That means almost 9.5% of local borrowers were delinquent, up from 4% a year before, the company said.

More than 41,000 of those borrowers had missed at least three payments, almost seven times as many as last July, Black Knight reported. Of all local homeowners with mortgages, 6% were at least three months behind, up from 1% a year earlier. The figures include borrowers in forbearance, Black Knight said. 

As the COVID-19 pandemic continues, lenders’ forbearance programs are allowing many homeowners to skip at least three mortgage payments. Federally backed mortgages typically offer more flexible terms such as allowing borrowers to delay payments until the end of the loan term, but many privately held mortgages require a lump-sum payment as soon as the forbearance ends. Nationwide, 7.16% of mortgage borrowers were in forbearance, the Mortgage Bankers Association reported Tuesday.

For those who have fallen behind, “what will hurt is if they do nothing and keep their head in the sand,” said Gale D. Berg, director of pro bono attorney activities at the Nassau County Bar Association. Once the forbearance periods end, she said, "the floodgates are going to open and there's going to be a mess."

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