As we close in on the one-year anniversary of the global COVID-19 pandemic, housing remains a bright spot on the economic landscape, despite challenges such as managing homeowners in forbearance and navigating the impact of foreclosure moratoria. Given the expansive nature of the pandemic and its fallout, it’s hard not to draw parallels with another devasting event that directly impacted the housing market–the 2008 financial crash and its aftermath.
However, according to the latest Fannie Mae’s Mortgage Lender Sentiment Survey, conducted in early September 2020, more than 100 mortgage executives said, despite similarities, the 2008 financial crash is still considered a more disruptive experience for homeowners, lenders, servicers, and others.
According to the survey, the biggest challenge servicers are facing due to COVID-19 is offering assistance to impacted homeowners via forbearance programs and in communicating post-forbearance repayment plan options.
However, it’s safe to say that lessons learned from the 2008 upheaval have provided an advantage to dealing with the 2020 COVID crisis. Mortgage lenders and servicers have been able to more deftly adapt to the pandemic’s difficulties.
Servicers said that clearly explaining post-forbearance payment plans to homeowners was the most frequent issue. Explaining potential implications of taking a forbearance plan was the second most difficult issue and thirdly, periodically checking with homeowners to see if they are ready to exit forbearance took up the most time.
Most respondents of the 2020 Fannie Mae survey said most aspects of servicing are less challenging this time, “including data and technology standards, the process by which homeowners request assistance, and more generally helping homeowners overcome hardship and stay in their homes.”
The one area in which respondents said it was more challenging in 2020 was keeping up with policy changes from investors.
It remains to be seen just what further issues may come as a result of COVID-19 because the housing industry has never handled this specific challenge. But it’s certain to say that industry is working together as much as possible to address the common issues created by this global pandemic.