The outbreak of the pandemic has been an eye-opener of sorts for the mortgage industry. It is likely to revamp the way lenders operate and will be a cornerstone for their business in more ways than one.
The average American spends a fortune on mortgages. With millions losing their employment, many were left in a precarious situation. Almost 4 percent of the adults in the States left their mortgages or rent obligations.
Unlike in most other cases, this time, the mortgage owners are far more empathetic. Plus, the US government’s corrective measures have further ensured the welfare of the lenders and the borrowers alike.
In Plaata article, we will discuss the impact of COVID-19 on mortgage payments in the USA.
What are the challenges that the lenders are facing because of the pandemic?
It is for the first time since 2008 that the mortgage industry is feeling the heat. While some challenges may not be far fetched and can only hamper operations in the near future, the pandemic shows clear signals of long-term changes in the way they operate.
Here are the challenges lenders are facing in the wake of the pandemic –
- product shelf
- impact on financial statements
- impact on earnings
- customer experience
Fiscal support helped, but it won’t last long.
The US government has announced a series of steps during the first half of 2020 to ensure that the lenders don’t bear the brunt of delayed payments. There is a high probability of entering another round of fiscal support, but it would need much more than merely that for the lenders to breathe freely.
What steps have lenders taken to downsize the impact?
In this turbulent phase, the responsibility of trying to stay afloat lies not only on the government alone but also on the businesses. Here is how lenders are trying to stay relevant –
- Reimagining business processes with the help of technological advancements.
- Utilizing advanced analytics to predict risks and liquidity.
- Introduce newer, improved products to reduce overall risks and cater to needs in an enhanced manner.
- Housing insecurity still looms large, and there is a stark difference across demographics.
Most of the old ways of operating seem redundant and are unlikely to gain importance anytime soon. Adopting newer methods backed by technological advancements is the way forward.