Several members of the House Financial Services Committee, including Chairwoman Maxine Waters, sent letters to the nation’s largest mortgage servicers, requesting information on their communication about relief to borrowers with federally-backed mortgages under the CARES Act.
“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 lawmakers wrote. “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. Similarly, borrowers seeking assistance must be able to contact a customer service representative without excessive wait times or other delays.”
Congressman Gregory Meeks (D-New York), Chair of the Subcommittee on Consumer Protection and Financial Institutions; Congressman Wm. Lacy Clay (D-Missouri), Chair of the Subcommittee on Housing, Community Development, and Insurance; and Congressman Al Green (D-Texas), Chair of the Subcommittee on Oversight and Investigations, were included in the letter.
The Committee sent letters to the following banks:
- Bank of America Corporation
- JPMorgan Chase & Co.
- Lakeview Loan Servicing, LLC
- LoanCare LLC
- Mr. Cooper Group, Inc.
- New Rez, LLC
- PennyMac Financial Services, Inc.
- Quicken Loans
- Truist Financial Corporation
- U.S. Bancorp
- Wells Fargo & Company
Efforts by MReport to obtain comments by several of these banks by press were not returned.
The Committee requested additional items from the indicated banks, including all policies and procedures effective as of or since March 27, 2020, related to accepting and processing requests for forbearance; applicable standards and requirements for approving forbearance requests; and initiating and continuing foreclosure proceedings. The Committee also requested training materials, instructions, and call scripts provided to customer service employees since March 27. The Committee also requested screenshots of all information provided on their websites, including an online platform to make mortgage payments.
Addressing the needs of pandemic-impacted homeowners has been a primary focus for the industry over the past two months. Government agencies such as Ginnie Mae, HUD, and FHFA have announced updated guidance or programs designed to address best practices and potential servicer shortfalls during this period.
The U.S. Congress passed the CARES Act to provide borrowers with federally backed mortgage protection, including a 60-day moratorium on foreclosures, which is set to expire on May 17.
However, one early concern that remains is liquidity as mortgage servicers are required to continue making payments on mortgage-backed securities to investors, despite a loss of revenue on the front end as more homeowners enter into forbearance plans as a result of COVID-19 economic impacts such as lost jobs or other financial struggles.
Addressing the mortgage servicing industry’s ongoing response to the COVID-19 pandemic, Ed Delgado, President and CEO of Five Star Global, said, “U.S. financial institutions reacted swiftly and responsibly to decrease the number of homes that could enter foreclosure and help the millions of Americans whose livelihoods are at stake.”
Delgado added, “The pettiness of politics is a corrosive agent, eroding confidence in the mortgage industry. At a time when we look to our business and political leaders for support, the inference that mortgage banks failed to respond in a timely and proper manner to the national health crisis is both reckless and irresponsible.”
More than 26 million Americans have filed unemployment claims over the past five weeks.