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M REPORT | 57 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA COVID-19's Impact: Homeowners vs. Renters Almost half of homeowners who missed mortgage payments this year reported being at least $2,000 behind on their mortgage. T he coronavirus pandemic continues to wreak havoc on housing payments, as a new data study released by Clever Real Estate found nearly half of homeowners who missed mortgage payments this year reported being at least $2,000 behind on their mortgage, while more than half are in a paycheck-to-paycheck lifestyle. In a survey of 1,500 adults conducted on September 9, 46% of homeowner respon- dents said they missed three or more payments since March, while 46% still owe at least $2,000—including 18% who have at least $5,000 in deferred payments. Renters were more likely to miss or defer rent payments (33%), but homeowners generally owed more on the payments they failed to make. The study also found 55% of homeown- er respondents were living paycheck-to- paycheck and 15% did not currently have stable income. In comparison, 72% of renter respondents said they were on paycheck- to-paycheck existence and 30% lacked a stable income. Homeowners admitted to increasing their credit card debt or using their emergency savings to cover expenses, while renters were more likely to either tap their retirement savings, sell personal items, take a gig economy job, borrow from family and friends, or move. Furthermore, the study found home- owners were 25% more likely to stash away funds for retirement than were renters, and they were two times more likely to report their savings would last six months or more. However, 54% of home- owners have spent at least $1,000 from their emergency funds since March, versus only 36% of renters. As for having money saved for the proverbial rainy day, the study also noted that 37% of respondents have no emergency savings, 21% reported never having emer- gency savings, and 16% reported running out of their emergency savings earlier this year. One in four respondents said they were forced to take on more nonmortgage debt as a result of the pandemic, and 54% of those in debt borrowed an additional $2,000 or more. Many Mortgage Lenders Expect Strong Q4 Pent-up consumer demand, continued low mortgage rates, and favorable mortgage spreads are driving lender profitability. A ccording to a recent Fannie Mae report, mortgage lenders have reason to rejoice this season in anticipation of a strong profit margin. The Fannie Mae report specifically high- lights the findings gleaned from its Q 3 2020 Mortgage Lender Sentiment Survey. Survey data for this third quarter showed that nearly half of all lenders (48%) are optimistic about how they will fare this next three-month quarter. In fact, this percentage said they believe that their profits will increase even more than they did in Q 3. Among the survey respondents who weren't as optimistic were the 37% who reported believ- ing that their profits would stay steady and remain the same this coming quarter. And no survey would be complete without the full picture, which is rounded out by the 15% of lender respondents who admitted to being less than optimistic for this coming quarter, expecting profits to decrease versus increase. The optimism driving the majority of those lenders expect- ing strong profits this quarter is based on the fact that consumer demand has stayed strong this past quarter across all loan types (i.e., GSE-eligible, non-GSE- eligible, and government). In fact, it has even reached record highs in many cases, bringing it back on par with this same time last year. Also reported to have stayed steady and robust was refinance mortgage demand, which was extremely hearty in the third quarter across all loan types. According to lenders, a further tightening of credit standards during the past quarter was experienced, and these tighter credit standards are fully expected to stay that way throughout the next quarter. Doug Duncan, Fannie Mae SVP and Chief Economist, commented on the current state of the hous- ing industry, particularly point- ing to its impressive recovery, even in the face of the current coronavirus crisis: "This quar- ter's MLS' results align with the strong housing recovery amid the larger economic downturn due to COVID-19. Lenders' reported purchase mortgage demand for the prior three months across all loan types have returned from sharp drops to the levels seen last year for the same quarter. Purchase demand growth expec- tations for the next three months reached the highest third-quarter readings since survey inception. For the third consecutive quarter, lenders' profitability outlook has remained a strong positive. Pent- up consumer demand, continued low mortgage rates, and favorable mortgage spreads helped drive lender profitability." Duncan further commented on what to expect in the coming months: "This quarter, lenders on net continue to report tightening of credit standards for the prior three months but expected no further tightening next quarter. Lenders attributed credit tightening to the uncertainty on the economic recovery and labor markets resulting from COVID-19. Although the housing market is showing remarkable strength amid the economic and health crisis, potential longer- term downside risks remain, including labor market weakness, low inventory, and home price uncertainty."