May 16, 2022

CFPB: Report Released on Mortgage Servicing Metrics

Hundreds of thousands of borrowers are still behind on loans after COVID-19 mortgage protections, forbearance end

Today, the Consumer Financial Protection Bureau (CFPB) published a report examining mortgage servicers’ responses to the COVID-19 pandemic. The data, collected across 16 large servicers from May through December 2021, reveal homeowners continue to face significant risks and challenges connected to working with their mortgage servicers. This problem is particularly acute for those borrowers struggling to make their mortgage payments after exiting COVID-19 hardship forbearances.

“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 CFPB Director Rohit Chopra. “We will be closely monitoring mortgage servicer performance to ensure that they are meeting their obligations under the law.”

Today’s mortgage metrics report reveals the challenges borrowers faced as CARES Act protections began to expire, and homeowners transitioned to restarting their monthly payments. At the end of 2021, approximately 330,000 homeowners had delinquent loans, their loans were no longer in forbearance, and they had no loss mitigation solution in place. One challenge for borrowers was their inability to reach, or get a timely response from, their 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 extent of these challenges varied significantly among servicers.

The CFPB has prioritized oversight of mortgage servicers throughout the pandemic. In August 2021, the CFPB published an initial review of mortgage servicer performance . Today’s report similarly uses data collected from examinations of 16 servicers. The 16 servicers represent a broad cross-section of the mortgage servicing industry. They are different in terms of the types of loans they service (VA, FHA, GSE, PLS, or portfolio), the pre-COVID pandemic delinquency status of the loans they service, and even the geography of where their serviced loans are located. The differences help to shed light on performance across the mortgage servicing market, and they may also help explain some of the variation identified in the report.

The findings from today’s report are pulled from key data points – including call center metrics, COVID-19 hardship forbearance exits, delinquency rates, and borrower profiles – all of which provide insights into the performance of mortgage servicers in serving borrowers in need of mortgage repayment assistance.

Key findings from the report include:

The CFPB’s continued monitoring and supervision of the mortgage market shows borrowers are still struggling with the after-effects of the pandemic, and the CFPB is encouraging mortgage servicers to enhance outreach to borrowers exiting forbearance and closely monitor data on borrower demographics and outcomes.

Read Mortgage Servicing COVID-19 Pandemic Response Metrics: New Observations from Data Reported by Sixteen Servicers for May-December 2021

This post was originally published here.