Delinquent borrowers who responded
to Fannie Mae’s National Housing Survey for the first quarter of 2012
expressed more negative viewpoints toward homeownership and paying their
mortgage compared to underwater borrowers and those who have seen their home
values decline. The data was collected to learn more about the attitudes of the
delinquent borrower population that is oftentimes difficult to reach.
A much higher percentage of
delinquent borrowers have considered stopping their mortgage payments compared
to underwater borrowers and those who have seen their home values decrease.
According to the survey, 41 percent of delinquent borrowers said they’ve considered
giving up on making payments, while only 11 percent of those who saw their home
values decrease considered stopping and 10 percent of underwater borrowers said
they considered giving up as well.
Out of all groups, delinquent
borrowers were also more accepting of defaulters. When asked if they thought it
was okay to stop making payments if one’s house is worth less than what is
owed, 23 percent of delinquent borrower said it was okay and surprisingly, only
7 percent of underwater borrowers answered yes.
Since its inception in January
2010, the Fannie Mae survey has found the attitudes of underwater borrowers are
generally similar to the total mortgage borrower population, which suggests
delinquency, not negative equity, is actually a greater influence on a
borrower’s attitude toward default.
“Results indicate that helping
keep mortgage borrowers current on their mortgage is a beneficial goal since
the negative attitudes resulting from delinquency for the borrower (and those
they influence) may be hard to repair and could evolve into ingrained
delinquency behaviors,” said Doug Duncan, senior VP and chief economist of
Fannie Mae, in a release.
When it comes to borrowers dealing
with financial distress, 40 percent of delinquent borrowers said it’s okay to
stop making payments if one is facing financial distress, while only 20 percent
of underwater borrowers said it’s okay.
In comparison to underwater
borrowers and those who have seen their home values decrease, delinquent
borrowers are also twice as likely to be stressed about their ability to make
payments.
For the first quarter of 2012, 82
percent of delinquent borrowers said they were stressed about making their
payments, while only 41 percent of those who saw their home values decrease
expressed stress and 35 percent of underwater borrowers said they were
stressed.
The majority of delinquent
borrowers (52 percent) are also more likely to rent than buy if they were to
move as opposed to underwater borrowers (18 percent) and those who saw their
home values decrease (19 percent).
Although there was little
difference between delinquent borrowers and the general populations when it
comes to confidence in the economy, delinquent borrowers were especially more
pessimistic when asked if they believe home prices will go up. Only 23 percent
of delinquent borrowers surveyed answered positively, while 30 percent of the
general population said yes.
According to Fannie Mae, the
reasons underwater borrowers and those who have seen a decline in the value of
their home have a similar attitude to the general population is because they
are still experiencing non-financial benefits of homeownership such as control,
personal security, and the best environment in which to raise children.
For the survey, ,3,451 telephone
interviews were conducted from January 9, 2012 to March 28, 2012 by Penn Schoen
Berland .
article source: http://www.dsnews.com/articles/-2012-06-15
No comments:
Post a Comment