As COVID-19 crisis recedes, homeowners continue to face challenges with mortgager servicers, CFPB reports

Homeowners continue to face significant risks and challenges connected to working with their mortgage servicers in the wake of the coronavirus crisis, the federal consumer financial protection agency said in a report issued Monday.

In its “Mortgage Servicing COVID-19 Pandemic Response Metrics: New Observations from Data Reported by Sixteen Servicers for May-December 2021,” the Consumer Financial Protection Bureau (CFPB) said the issue is “particularly acute” for borrowers struggling to make their mortgage payments after exiting COVID-19 hardship forbearances.

The bureau said in a release that at year’s end 2021, approximately 330,000 homeowners had delinquent loans, their loans were no longer in forbearance, and they had no loss mitigation solution in place. The agency described those conditions as evidence of the challenges borrowers faced as CARES Act protections began to expire, and homeowners transitioned to restarting their monthly payments.

Key findings of the report, the agency said, include:

  • Many borrowers exited COVID-19 hardship forbearance with no loss mitigation solution in place;
  • Some mortgage servicers significantly lag industry peers in call center response times;
  • Data on borrowers’ language preferences remained limited;
  • Some mortgage servicers relied on systems that could not provide information on key metrics.

The bureau said its report uses data collected from examinations of 16 servicers, which 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 agency said. “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.”

CFPB Releases Report on Mortgage Servicing Metrics