The pandemic, along with the economic downturn it has caused, leaves homeowners across the country struggling to meet their mortgage payments. This has put more pressure on the Consumer Financial Protection Bureau (CFPB) to find ways of helping homeowners who have been impacted by COVID-19.
At this year’s MBA Convention and Expo, Kathy Kraninger, director of the CFPB responded to questions posed by Susan Stewart, 2021 MBA chairman and CEO of SWBC Mortgage. One of the biggest topics of discussion that Kraninger addressed was how the CFPB is taking measures to inform the public about what they can do if they are having trouble making their home loan payments.
“It starts first and foremost with the flexibilities that the CARES Act provided,” Kraninger said. “Congress and the administration acted very swiftly in that process. And we also move swiftly from the Bureau's standpoint, in getting that information out.”
Kraninger discussed how the CFPB made informative materials like videos and blogs available online to inform the public, including videos in both English and Spanish. Much of this content focused on “what the CARES Act mortgage forbearance program was,” so that those struggling to make their home loan payments could understand their options.
The videos and blogs have already reached 4 million people, according to Kraninger.
“We really are reaching people,” Kraninger said. “We still know there are more people to reach as well, so we're engaging with the mortgage servicing consortium” as well as the Urban Institute.
The messaging that CFPB has put out is particularly meant to inform “individuals who have not yet extended their CARES Act forbearance” or those who have not applied but may still qualify.
“You have an option here to actually stay in your home,” Kraninger said. “And that's certainly an important message, recognizing the impacts of the pandemic.”
As the CEO of a servicer, Stewart said that this is the kind of information the public needs to know.
“One of the things that we now all grappling with is to make sure people know that, go ahead and be in contact,” Stewart said. “It's better to make the call and ask for help and explain your circumstances and extend or do what you need to do.”
Aside from getting forbearance information out to the public, Stewart also asked Kraninger about the CFPB’s release of a proposal for a new category of “Seasoned” Qualified Mortgage (QM).
“We believe that a pricing threshold is a more holistic measure of an individual's ability to repay than DTI [Debt-to-Income Ratio] alone,” Kraninger said. “We also knew that the 43% DTI-- if that were strictly put in place, and strictly followed without the Patch [Government-Sponsored Enterprise (GSE) Patch] as a valve to let off some of that steam--would really preclude access to credit and really reduce the pay for many people”
On the same day that Kraninger spoke at the virtual conference, the CFPB announced that it would be extending the GSE Patch.
Looking ahead, Stewart asked Kraninger about what may happen beyond the pandemic when borrowers begin to exit the CARES Act and other loan forbearance programs and whether or not the CFPB monitor for any particular risk to consumers in the post-pandemic future.
Kraninger said that the CFPB would do just that. She said the Bureau would continue to talk to servicers about what challenges they are facing and what they’re hearing from consumers. Kraninger said doing this will help with “figuring out a level playing field, figuring out issues happening across the market.”