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Homeowners Continue to Face Challenges After the Pandemic

The Consumer Financial Protection Bureau (CFPB) has published a new report examining 16 large mortgage servicers responses to the COVID-19 pandemic. Collected between May and December 2021, data reveals that homeowners continue to face “significant risks and challenges” connected to working with their mortgage servicers when struggling to make payments after exiting forbearance. 

“While many mortgage servicers are successfully assisting borrowers to avoid foreclosure, today's report highlights that some servicers are lagging their peers and are less well-equipped to assist borrowers who have exited pandemic housing protections,” said Rohit Chopra, the CFPB Director. “We will be closely monitoring mortgage servicer performance to ensure that they are meeting their obligations under the law.” 

The Mortgage Metric Report found that at the end of 2021, some 330,000 homeowners had delinquent loans with no loss mitigation plan in place. Buyers cited the main reason they were not on a forbearance plan was their difficulty, or inability, to reach a mortgage servicer’s call center. 

“Mortgage servicer call centers are vital links between the homeowner and servicer that answer homeowners’ questions and provide them with information to make important decisions about their loans,” the CFPB said. “The extent of these challenges varied significantly among servicers.” 

Oversight on mortgage servicers has been prioritized throughout the pandemic. The data for this report was based on responses and examinations from 16 servicers which represent a cross-section of industry as a whole. Metrics included in the report were: call center metrics, COVID-19 hardship forbearance exits, delinquency rates, and borrower profiles. 

Key findings from the report include: 

  • Many borrowers exited COVID-19 hardship forbearance with no loss mitigation solution in place. The 16 servicers reported that over 330,000 borrowers’ loans remained delinquent–with no loss mitigation solution in place–at the end of 2021. Delinquency rates were higher for private loans–between 25% and 39%–than for federally backed loans–between 11% and 17%. While servicers have made progress working through delinquent loans, exiting a COVID-19 hardship forbearance with no loss mitigation solution in place puts a borrower at a heightened risk of foreclosure. 
  • Some mortgage servicers significantly lag industry peers in call center response times. Call metrics showed average hold times of more than ten minutes and call abandonment rates exceeding 30% for some servicers. The call metrics indicate that some borrowers may have difficulty establishing live contact and obtaining assistance over the phone to resolve their mortgage questions or challenges. These metrics varied among servicers, with some servicers performing well and others poorly. 
  • Data on borrowers’ language preferences remained limited. While the CFPB consistently has recommended that servicers collect and maintain information on borrowers’ preferred language, several servicers marked that many of their borrowers’ preferred language was unknown. Among the servicers who provided language preference data, the percentage of borrowers in delinquency and who had a non-English language preference, increased during the reviewed period. Conversely, the percentage of borrowers in delinquency and who identified English as their preferred language, decreased. Recent action by the Federal Housing Finance Agency requiring mortgage originators to inquire about language preference at the time of origination could help close the gap in delinquency rates between English and non-English speakers. 
  • Some mortgage servicers relied on systems that could not provide information on key metrics. Some servicers did not track or were otherwise unable to provide several requested metrics. Additionally, some servicers reported inconsistent data. The report notes that some servicers are not fully able to track and report high-quality data. The CFPB is concerned about whether these servicers are able to ensure that all borrowers, and particularly those borrowers most in need of assistance, receive adequate and timely assistance in compliance with federal consumer financial protection law. 

Click here to read the 28-page report in its entirety. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.
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