Four of the leaders of the House Financial Services Committee want much more information from the nation’s biggest mortgage servicers on how many borrowers are asking for forbearance and how that process is going for those borrowers.
Reps. Maxine Waters (D-CA), chair of the House Financial Services Committee; Gregory Meeks (D-NY), chair of the Subcommittee on Consumer Protection and Financial Institutions; Wm. Lacy Clay (D-MO), chair of the Subcommittee on Housing, Community Development, and Insurance; and Al Green (D-TX), chair of the Subcommittee on Oversight and Investigations; sent a letter this week to 11 of the biggest servicers, pressing them for information on forbearance.
The letter, which was sent to Bank of America, JPMorgan Chase, Lakeview Loan Servicing, LoanCare, Mr. Cooper, NewRez, PennyMac Financial Services, Quicken Loans, Truist Financial, U.S. Bancorp, and Wells Fargo, asks each servicer to provide a variety of information about each company’s forbearance program.
“Millions of homeowners will rely on the relief included in the CARES Act as they struggle to make timely mortgage payments in the coming months,” the Democrats wrote in the 11 identical letters.
“As one of the largest servicers of federally-backed mortgages, it is critical that you communicate consistent and accurate information regarding the options available to borrowers who are unable to make their mortgage payments due to financial hardship that is directly or indirectly related to the pandemic,” the Democrats continued. “Similarly, borrowers seeking assistance must be able to contact a customer service representative without excessive wait times or other delays.”
The Democrats sent the letters out just over a week after a federal watchdog published a report claiming that some of the largest mortgage servicers in the country were giving borrowers “confusing and, at times, seemingly contradictory” information about forbearance.
In the report, the Department of Housing and Urban Development‘s Office of the Inspector General said that many of the top servicers’ websites were providing borrowers with information about forbearance that is “incomplete, inconsistent, dated and unclear.”
The HUD-OIG report did not identify the servicers it reviewed by name, but it did say that it reviewed the websites of the top 30 Federal Housing Administration mortgage servicers, so it’s likely that there is some overlap between the servicers cited in the HUD-OIG report and those that received a letter from the House Democrats.
The CARES Act, which was signed into law in late March, stipulates that borrowers whose mortgage is backed by either the government or the GSEs who is experiencing a COVID-19-related hardship can request and must be granted forbearance of up to 180 days, which then may be extended by an additional 180 days if necessary.
And the Democrats seem like they want to make sure that’s happening.
To that end, the Democrats’ letter presents a list of 13 questions, many with several subsections, to each of the servicers, and ask the servicers for answers to those questions by the middle of May.
Include among the questions are:
All policies and procedures effective as of or since March 27, 2020 related to:
a. accepting and processing requests for forbearance;
b. applicable standards and requirements for approving forbearance requests; and
c. initiating and continuing foreclosure proceedings.
Records sufficient to show:
a. the number of forbearance requests received since March 27, 2020;
b. the number of forbearance requests approved since March 27, 2020; and
c. the average length of the forbearance period communicated to borrowers since March 27, 2020.
All form letters, templates, and other standardized Communications sent to individuals whose mortgage you service, including but not limited to, emails, texts, letters, or through any form of social media effective as of or since March 27, 2020 related to:
a. assistance available for borrowers experiencing financial hardship; and
b. initiating and continuing foreclosure proceedings.
In the letters, the Democrats request that each servicer provide answers to their questions by May 15, 2020.
Click here to see a copy of the letter to Bank of America. Each of the servicers received an identical letter.