CFPB Releases Report on Mortgage Servicer Plans | Consumer Protection Agency

Washington, DC – Today, the Consumer Financial Protection Bureau (CFPB) published a report examining the response of mortgage service providers to the COVID-19 pandemic. The data, collected from 16 major lenders from May to December 2021, shows that homeowners continue to face serious problems and challenges related to working with their mortgage. This problem is especially acute for those borrowers who are struggling to pay their mortgages after coming out of the COVID-19 crisis.

“While many mortgage brokers are successfully helping borrowers avoid foreclosure, today’s report shows that some services are trying their peers and not enough unprepared to help borrowers who are out of foreclosure,” said CFPB Director Rohit Chopra. “We will closely monitor the performance of mortgage services to ensure that they meet their obligations under the law.”

Today’s mortgage report shows the challenges borrowers faced as CARES Act protections began to expire, and homeowners shifted to restart their monthly payments. At the end of 2021, approximately 330,000 homeowners had bad loans, their loans were no longer in forbearance, and they had no mitigation solutions applied. One of the challenges for borrowers is their inability to reach, or get a quick response from, their mortgage call center. Mortgage call centers are important links between home owners and servicers who answer home owners’ questions and provide them with information to make important decisions about their loans. Many of these challenges varied greatly between service providers.

The CFPB has prioritized oversight of mortgage lenders throughout the pandemic. In August 2021, the CFPB published a initial assessment of the performance of mortgage services . Today’s report uses data collected from 16 employee surveys. The 16 servicers represent a broad cross-section of the mortgage industry. They differ in terms of the types of loans they service (VA, FHA, GSE, PLS, or portfolio), the pre-COVID default status of the loans they service, and even the map where they have loans. The differences help to explain the performance on the market of mortgage services, and can also help to explain some of the variations shown in the report.

The information from today’s report is pulled from key data — including call centers, COVID-19 patient withdrawals, default rates, and borrower data — all of which provide insights into performance. A mortgage servicer serving borrowers who need to repay their mortgages. help

Key takeaways from the report include:

  • Many borrowers left the COVID-19 crisis without a reduced income solution. 16 servicers reported that more than 330,000 borrowers’ loans remained in default – without a loss mitigation solution – at the end of 2021. Credit rates were high for private loans – between 25% and 39% – than federally sponsored loans – between 11. % and 17%. As the service moves forward through bad loans, getting out of the difficult COVID-19 patient without a bad debt problem is This puts a borrower at a high risk level.
  • Some mortgage servicers are very dismissive of brokers with response times at the main centers. Call rates showed hold times of more than ten minutes and call drop rates of more than 30% for some services. The phone rate indicates that some borrowers may find it difficult to establish direct contact and receive assistance over the phone to resolve their issues. mortgage questions or challenges. These metrics vary between services, and some services are performing well while others are not.
  • Data on the languages ​​preferred by borrowers remained limited. Although the CFPB still recommends that servicers collect and maintain information about borrowers’ language preferences, many service providers indicated that they preferred multiple languages. there is unknown. Among the services that provided language-oriented information, the percentage of non-English speaking delinquent borrowers increased over the period. was considered. On the other hand, the percentage of delinquent borrowers who declared English as their preferred language, decreased. Recent work by Federal Housing Finance Agency Requiring mortgage originators to ask about language preference at the time of origination could help close the crime rate gap between English and non-native speakers. Britain.
  • Some mortgage servicers relied on systems that could not provide accurate rates. Some services have not been checked or failed to provide ratings. Additionally, some services reported inconsistent information. The report states that some services are not fully able to track and report high data. The CFPB is concerned about whether these services can ensure that all borrowers, particularly those in need, receive reasonable and appropriate assistance in complying with the federal securities laws.

The CFPB’s continued monitoring and oversight of the mortgage market shows that borrowers are still struggling with the after effects of the pandemic, and the CFPB is encouraging mortgage lenders to improve. reaching out to borrowers with patience and careful monitoring of data on borrower numbers and results.

Read Mortgage Servicer COVID-19 Infection Rates: New Data from Data Reported by Sixteen Servicers for May-December 2021.

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The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal financial laws and ensures that markets for financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.

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