The Mortgage Bankers Association’s (MBA) in a recent release revealed that the total number of loans now in forbearance increased to 7.91% of servicers’ portfolio volume. According to MBA’s estimate, almost 4 million homeowners are now in forbearance plans.
With unemployment rising from historical lows in early 2020 to a record 14.7 percent in April, it is inevitable that mortgage delinquencies would increase as well. 33.5 million U.S. workers applied for unemployment benefits in the past seven weeks, and with signs of economic distress continuing into the second quarter, mortgage delinquencies will likely further increase. With it, the forbearance numbers as well will continue to rise.
Servicers clearly are not well prepared for this deluge. With the current COVID-19 situation, staff and skill availability is also getting to be a challenge. Not managing these requests well and lapses from servicing staff can also lead to hefty penalties from CFPB owing to non-compliance.
It is in the servicer’s best interest that these default cases do not move into foreclosure and most of the adjustments can be managed during the loss mitigation and loan modification stage. You need skilled staff, who can engage with the borrowers, based on these requests, and take them to a logical conclusion.
PrivoCorp is here to help servicers. We are operational across our global centers and have been able to ramp up operations to almost 150% capacity to support our clients.
Allow us to help you with Default Servicing, Loan Modifications, Loss Mitigation. Reach out to us, we would love to help. Reach out to us on firstname.lastname@example.org