Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272848 
Year of Publication: 
2022
Series/Report no.: 
Staff Report No. 1035
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We study how intermediaries-mortgage servicers-shaped the implementation of mortgage forbearance during the COVID-19 pandemic and use servicer-level variation to trace out the causal effect of forbearance on borrowers. Forbearance provision varied widely across servicers. Small servicers and nonbanks, especially nonbanks with small liquidity buffers, facilitated fewer forbearances and saw a higher incidence of forbearance-related complaints. Easier access to forbearance substantially increased mortgage nonpayment but also reduced delinquencies outside of forbearance. Part of the liquidity from forbearance was used to reduce credit card debt, but most was saved or used for nondurable consumption.
Subjects: 
mortgage
forbearance
liquidity
nonbank
CARES Act
COVID-19
JEL: 
G21
G23
G28
Document Type: 
Working Paper

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