Data shows mortgage services helped homeowners stay afloat during pandemic
Millions of Americans have lost their jobs, and many have seen their incomes take a noticeable hit during the coronavirus pandemic. This spread to homeowners, many of whom could no longer meet their mortgage payments.
The CARES law, which was passed last March to provide relief from coronaviruses, has allowed financially troubled homeowners to put their mortgages on hold. During this time, borrowers could suspend their monthly payments without being reported as past due.
Things moved quickly on the relief front – owners were entitled to abstention from the signing of the CARES Act. This meant that mortgage managers had to process forbearance requests with little advice or advance warning. Still, it seems they managed to get on the plate.
The Consumer Financial Protection Bureau (CFPB) recently released its 2020 Consumer Response report, which records consumer complaints. He found that while overall complaints were up 54% year-over-year, complaints against mortgage agents were actually down 3.5%. This shows that mortgage managers may have gone above and beyond last year. And that should give borrowers hope that their loan officers can work with them after their forbearance periods are over.
6 simple tips to get a 1.75% mortgage rate
Secure access to The Ascent’s free guide on how to get the lowest mortgage rate when buying your new home or refinancing. Rates are still at their lowest for decades, so act today to avoid missing out.
By submitting your email address, you consent to our sending you money advice as well as products and services which we believe may be of interest to you. You can unsubscribe anytime. Please read our privacy statement and terms and conditions.
Homeowners need options – and loan officers may be willing to comply
At the onset of the pandemic, many loan departments struggled to keep up with the volume of forbearance requests. In fact, in less than 10 weeks, mortgage agents helped 4.3 million Americans pass forbearance plans.
But these forbearance agreements will soon end. The abstention reaches a maximum of 18 months. Borrowers who suspended their home loans at the start of the pandemic may have to start making payments as early as September or October. The CFPB has made it clear that it expects mortgage managers to work with borrowers to avoid a massive wave of foreclosures. And based on past performance, loan managers may, in fact, step up again.
Those who come out of forbearance and still cannot manage their mortgage payments may be able to modify their loans. This could, in turn, lower their monthly payments.
In fact, some loan managers may already be preparing for an influx of appeals this fall. Like most of us, loan officers were caught off guard from the start of the pandemic. But at this point, they have the opportunity to prepare for this post-abstention crisis – and determine how they are going to handle it.
Of course, it is possible that the mortgage forbearance will be extended beyond its current 18-month expiration. Initially, the forbearance of the CARES law only allowed 12 months of suspended payments, so borrowers have already been granted a greater stay. But even if patience is cut after 18 months, homeowners should breathe easier knowing they have options – and their loan officers could do whatever they can to help them.