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Loan Delinquency Projections for COVID-19
The authors forecast the effects of the COVID-19 pandemic on loan delinquency rates under three scenarios for unemployment and house price movements. In the baseline scenario, their model predicts that loan delinquency rises from 2.3 percent in 2019 to a peak of 3.9 percent in 2025 with a total of $580 billion in write-offs. In 2021, absent policy intervention, the model predicts that delinquency would be 3.1 percent. However, mortgage forbearance, student loan forbearance, and fiscal transfers keep delinquency from increasing in 2021. The greatest reductions in delinquency are achieved ...