Good afternoon —
Servicers have been in the crosshairs of regulators for as long as I've been at HousingWire.
I didn't attend the 2014 MBA Servicing conference where Steven Antonakes, former deputy director of the CFPB, called out servicers directly, saying he was "deeply disappointed by the lack of progress" the servicing industry had made after the foreclosure crisis. But I've been at many events since then, including in 2016, where then-Director Richard Cordray said that the CFPB had "met the industry halfway" by adopting a "reasonable, good-faith approach."
As you can imagine, not everyone shared that sentiment.
Fast forward to 2020 and servicers have been doing their best to deal with a crisis that was wholly outside their control. And it's been a huge job. Nearly 5 million mortgage loans were in forbearance in May 2020, and now that number is down to 1.6 million, so servicers have already been very busy. But with forbearance plans expiring soon, the number of exits servicers have to work through has become a fire hose again.
According to Black Knight, nearly 750,000 active forbearance plans will expire in the next two months, which means servicers will process up to 18,000 plans per business day over those two months. Wow!
One looming issue throughout this period has been borrowers exiting forbearance and becoming delinquent, without any loss mitigation process in place. Now, the CFPB has warned servicers that it's watching these exits and the aftermath very closely.
The CFPB issued a new report last week looking at data from 16 mortgage servicers from December 2020 to April 2021. It said it found a marked increase in these kinds of exits and admonished servicers to compare their results with those in the report. "Servicers who find themselves at the bottom of the pack should immediately take corrective steps," said CFPB Acting Director Dave Uejio. "The CFPB will hold accountable those servicers who cause harm to homeowners and families."
Call me an optimist, but I think this is the servicers' time to shine. I think we're going to look back on this period and recognize the great work servicers did to help distressed borrowers.
Until tomorrow —
Sarah Wheeler
HousingWire Editor in Chief
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