Report outlines mortgage servicers’ varied responses during COVID-19 pandemic

The CFPB released a report on Tuesday, finding that mortgage servicers’ response to the COVID-19 pandemic was “varied.”

Focusing on metrics such as call handling and loan delinquency rates, the report details supervisory data from 16 large servicers to understand how they have interacted with homeowners during the pandemic and whether those interactions were effective. For example, the report notes that call responses varied, noting that many servicers managed to handle high call volume with an average hold time below three minutes, while others reported keeping callers waiting for as long as 26 minutes.

Other key findings of the report include:

  • call metrics, with most servicers reporting abandonment rates of less than 5% during the reporting period, while others exceeded 20%, and one peaked at 34%;
  • many servicers saw increased delinquent exit rates in March and April 2021, and some servicers were clear outliers; for federally backed loans, three servicers, which used the same sub-servicer, had relatively higher delinquent exit rates for one or more serviced portfolios – consistently exceeding 50%;
  • overall delinquency rates ranged from about 1% to 26% for both federally backed and private loans;
  • nearly half of servicers in the report clearly stated that they did not collect or maintain information about borrowers’ LEP status, which may lead to borrowers not receiving needed language assistance, while some servicers also reported not maintaining data on borrowers’ race, which may raise the risk of fair lending violations; and
  • forbearance was widely available for borrowers with both federally backed and private loans, and the reported denial rates were consistently low for both loan types.

The full Mortgage Servicing Metrics Report is available on the CFPB website.

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