The Consumer Financial Protection Office Recently, the Consumer Response 2020 was published to Congress report. While the total number of complaints increased by 54% compared to the previous year, the number of complaints against mortgage banks rose by only 7.5% and the complaints against mortgage service providers by as much as 3.5%.
These results are remarkable given the speed and impact of the pandemic on the mortgage finance industry.
Millions of Americans lost their jobs and incomes in a flash. Congress responded by adopting the CARES ActThis included leniency mandates, eviction and foreclosure moratoriums as well as prohibitions against adverse credit reports. All of this took effect immediately, and mortgage servants were asked to execute these guidelines with little guidance on how to ensure compliance with the new law.
The service industry also had to do this while moving its own employees from the office to their homes. In less than 10 weeks, mortgage servants successfully helped 4.3 million Americans create forbearance plans. According to Black KnightThe servicers provided nearly $ 19 billion in unpaid principal and interest to investors over the past year.
At the same time, as mortgage service providers implemented convention and agency mandates, the industry responded to consumer questions and concerns with immediate, tangible solutions. We worked with the GSEs to develop better call scripts to ensure that borrowers at risk understood their options. We have supported efforts to expand the deferred payment option for borrowers and provide a streamlined exit process with no documentation. We have also advocated that lenient loans continue to be allowed for sale, which provides security and eliminates market risk.
Lessons from the financial crisis and recent natural disasters also proved valuable. The flexible change has been optimized, for example, so that homeowners can keep their house and create a different payment plan. And we’ve hired the GSEs and FHA to change the underwriting so that borrowers exiting a COVID-19 forbearance can get new funding soon after they exit, without the credit bug that is preventing them from refinancing.
Finally, I would like to draw attention to the lenders who, amid economic uncertainties and a near-national lockdown, have still found ways to write and finance home purchases and help borrowers refinance their mortgages. Not only did this help borrowers, but it also gave the country’s economy a much-needed boost in credit, trade, and production.
We have a long and uneven road ahead of us, but the past has been instructive. Nobody wins when a loan defaults. The ability of the industry and mortgage service providers to overcome the barriers created by COVID-19 depends on our ability to collaborate, listen and learn, and keep the interests of the country’s borrowers and lenders first.
This column does not necessarily reflect the opinion of the editors of HousingWire or its owners.
How to contact the author of this story:
Robert Broeksmit [email protected]
To contact the editor responsible for this story:
Sarah Wheeler at [email protected]