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e increase in forbearance activity continues to
accelerate, with homeowners heading in all directions:
exiting, extending, and, for some types of loans, entering
forbearance for the first time. With this increased demand,
servicers must have a plan in place to track and support
customers. e key to creating successful exits and
maximizing revenue is the use of new digital tools for real-
time insights.
e first wave of forbearance exits is well
underway, with May marking the tenth week in
a row of increased exit rates. e news has been
largely positive as many homeowners remain on
track with payments.
Mike Frantantoni, SVP and Chief
Economist of the MBA, recently noted that
"homeowners who have exited forbearance and
been able to take up their original payment
again are performing at almost the same rate as
the overall mortgage servicing portfolio."
However, those homeowners who remain in
forbearance are likely facing ongoing challenges
such as lost jobs, reduced income, and other
pandemic-related hurdles. Many may continue
to fall further behind.
Complicating these concerns are the
expiration of extended unemployment benefits
and the moratoria on foreclosures. As a result,
when this next group hits their forbearance
deadlines, they may struggle with loan
repayments more than their predecessors.
THE LOSS MITIGATION WATERFALL
Servicers know that the key to creating
a soft landing for these borrowers post-
A TALE OF
TWO EXITS
With this increased demand, servicers must have a plan in place to track
and support customers. The key to creating successful exits and maximizing
revenue is the use of new digital tools for real-time insights.
Quick Take By: Nadim Homsany