DS News

DS News December 2020

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

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Page 59 of 100

58 real payment determinations in response to borrower needs and handling distressed borrowers in as timely and thorough a manner as required. Many servicers may have kept their heads above water while rising to the onslaught of forbearance relief requests under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. To say servicers have stabilized, however, would be a fallacy. Another historic storm year and the largest wildfire season on record pushed demands for borrower relief to unfathomable levels. e annual hurricane season runs from June 1 to November 30. As the current season has progressed, the U.S is on track to surpass the previous 2005 storm record of 28 named storms. Not to be overlooked, this year's wildfire season has reached unprecedented levels as well. Wildfires typically hit from August to November. By the end of October, the U.S. reported over 47,000 wildfires that had burned more than 8.5 million acres this year, destroying more than 13,000 structures in California, Colorado, New Mexico, Idaho, Oregon, and Washington. Although mortgage servicers have contended with record-high natural disaster levels for the past five years, addressing borrowers in need of disaster relief is difficult to manage even outside of the pandemic—but the pandemic certainly made things worse. Despite unemployment, delinquency, and forbearance rates, many borrowers have received temporary relief through CARES Act options. is has been especially true for those borrowers with Fannie Mae and Freddie Mac loans. Many of them have already moved out of forbearance into a normal payment mode, having deferred forborne payments to loan payoff, or having migrated into other relief alternatives. Yet, despite some relief, current delinquency trends remain dangerously high. Even as 90-day-plus delinquencies ebb, well more than 2 million homeowners remain seriously delinquent. Additionally, the number of loans that are not eligible for relief under the CARES Act, which only extends to federally-backed mortgage loans, remains excessive. is poses further obstacles to recovery for those borrowers that may have received early relief from their servicer but have no guaranty of future access to these options simply because their loans do not fall into the government-owned category that includes Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the Veterans Administration (VA), the U.S. Department of Agriculture (USDA), or the Federal Home Loan Bank (FHLB) mortgage partnership finance (MPF) mortgages. e question becomes, what does drinking from the delinquency fire hose look like once the remaining borrowers in forbearance roll off ? With so much uncertainty continuing to surround the pandemic impact, including ongoing unemployment, the sunset of foreclosure moratoriums, and the end of CARES Act forbearance, mortgage servicers need efficiency, accuracy, and radically smart automation in their default servicing solutions. It is crucial to prepare for loss mitigation activity that far surpasses the means used to move through the Great Recession. While working amidst ongoing financial burdens resulting from investor advances and the high cost of servicing delinquent loans, servicers desperately need innovative technology that is affordable and easy to deploy consistently and rapidly. INNOVATING FOR SPEED AND SCALE Although it is easy to be overwhelmed by what the balance of this year and 2021 hold in terms of supporting distressed borrowers, servicers have a real opportunity to change how they approach loss mitigation, and it is through technology. Mortgage servicers no longer need to resort to manual intervention, where they become burdened by antiquated systems and platforms that dictate how you do business, or by proprietary solutions that can be inconsistent in terms of cost and efficiency. But not just any solution will do. When it comes to selecting technologies, it is crucial that servicers not have to wait for capabilities that are slow to deploy or require constant updates and "fixes" in order to meet the needs of staff, borrowers, and even investors. In 2021, servicers will need to analyze their default servicing strategy, now more than ever, and their approach to business operations must Another historic storm year and the largest wildfire season on record pushed demands for borrower relief to unfathomable levels. Feature By: Jane Mason

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