In his latest blog, “How Past Challenges Made Housing Ready for COVID,” Fannie Mae President David Benson notes that he is encouraged by the response so far from lenders, servicers, and the market, but knows a great deal of work lies ahead.
Fannie Mae was born out of The Great Depression more than 80 years ago, and one of its primary responsibilities was to stabilize the housing and mortgage markets in times of crisis. The challenges posed by COVID-19 put that responsibility to the test.
Benson notes the industry did three main things in response to the pandemic:
- Acted with speed and urgency
- Public-private coordination
- Stepped up information and outreach efforts
“We knew that to support homeowners, renters, and the market at large, speed and agility were necessary,” said Benson. “In fact, the need for action was even more urgent than in 2008, as COVID-19 engulfed the entire economy in mere weeks affecting millions of families at once, rather than rippling through different sectors over several years.”
The industry’s investment in digital capabilities allowed for larger scale interventions as desktop appraisals, remote notarization, and the electronic signing of loan documents. This meant people could still close on their mortgages, and the housing finance system could continue to function smoothly.
And as the adoption of technology was a means to speed and accuracy, the regulatory side of the industry needed to be addressed as well.
“That meant coordinating closely with industry stakeholders, particularly the Federal Housing Finance Agency (FHFA), our regulator and conservator,” said Benson. “In the first weeks of the national emergency, we rapidly instituted new policies related to mortgage delinquency, forbearance, foreclosures, and evictions, a process that began even before the enactment of the CARES Act.”
A nation caught off guard by the pandemic left countless homeowners in a state of flux about their finances and what could be done to alleviate the stress of this burden. That responsibility fell upon the shoulders of the industry, as they had to educate and guide Americans through this new norm.
“Another thing we learned from the last crisis was that accurate information and outreach are critical to helping struggling borrowers and renters,” said Benson. “Developing new solutions to help homeowners and renters does not really matter if you don’t have a way to let them know about the tools. We are continuously looking for new ways to ensure as many borrowers and renters as possible who need assistance are taking advantage of the relief options available to them.”
Click here for more on Fannie Mae President David Benson’s latest commentary.