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34 The Exchange Stanley Middleman is the CEO of Freedom Mortgage Corporation and founded the company in 1990. Following the Great Recession, he was able to transform his company into a market leader in VA mortgages and government insured lending. Employing more than 4,000 people in all 50 states, in 2019 Stanley was the recipient of the Ernst and Young Entrepreneur of the Year, Greater Philadelphia Award, financial services category. How can the mortgage industry best assist homeowners coming out of forbearance? First of all, we've been able to help, I guess, in excess of 85,000 consumers defer their payments or be eligible to defer their payments as a result of this COVID-19. And it's really interesting to see what kind of people live in this country. People that have government loans are the primary participants in this, and even those consumers that have had the challenges around this disease, which is just awful, most of them, or many of them at least, continue to pay and may not even need the forbearance. So for those consumers that are eligible, applied, and were granted forbearance, and the bar was clearly low, it was easy to take advantage of, but a lot of people didn't take advantage of it. And it was really on the honor system. To see so many people be able to make their payments, it really restored my faith in humankind. For those people that did take advantage of it and really needed the help, and where it's become an important tool in managing their own personal financial environment, there's a lot of options as we come off of forbearance. Some of the tools have not been completely refined by places like HUD, for the FHA and the VA and USDA. e final rules are not placed, but essentially what happens is when forbearance ends, the consumer has basically three things that can happen. One, they can obviously pay all their money back and just go on with their lives, and for most people that didn't take it at all, it'll be like it never happened. e second thing that could happen is that we could modify their loan, and it just becomes part of their new loan at a lower interest rate, and we go through the normal waterfall of events. Another thing that could happen is that that loan amount, whatever it was that was deferred, gets added onto the end of the loan, and then at the end of the loan, interest free. And then that loan will come due, as stipulated in the CARES Act. Now, exactly how that all happens and the rules that have not been released by the FHA, it's not as clear yet, but that's the way it would work for a conforming loan. And each loan type is going to be different, each investible habits, on site guidelines. And we're obviously going to follow all the rules, but that's fundamentally what would happen. I think that by and large, many of these people will either refi or get a modification, depending on the tools that are at our disposal. And what that'll do is it'll put a consumer even in a better situation, because they'll be able to get their interest rate lower. And at the end of the day, it'll feel like this didn't even happen. So it's very encouraging, sitting in my seat, knowing that we've helped so many people through this crisis, and at the same time have helped them resolve their issues and get into a better financial situation than they otherwise might've been. In what ways is the current economic downturn different from the Great Recession? One big reason, but a couple of other smaller reasons. But I think that the focus should be on the asset, the underlying asset, particularly in terms of the mortgage industry, and housing in particular. When we think about the Great Recession, we were in a period "We've been able to help in excess of 85,000 consumers defer their payments as a result of this COVID-19." Stanley Middleman CEO, Freedom Mortgage Corporation Get to Know Industry Executives Beyond the Boardroom

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