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Photo by Torsten Dederichs on Unsplash

Background

When Congress passed the CARES Act in March 2020, it allowed borrowers of “federally backed” mortgages to ask for a six-month payment forbearance. To date, nearly 7% of outstanding mortgages are now in forbearance versus only 0.25% of loans in forbearance in early March. This number is only expected to increase as more and more Americans file for unemployment and apply for financial assistance. As this crisis unfolds, we see a tidal wave of work in the future for servicers and the need to adopt technology enabled solutions will be crucial.

As a reminder, a forbearance:

Is a temporary postponement of mortgage payments. It is given to a borrower who is facing a short term hardship. The missed monthly mortgage payments are always expected to be paid back at some point in the future, either through a full reinstatement of the loan (a lump-sum payment of missed payments) or through a repayment plan, or through other means. Furthermore, the servicer is obligated to review the borrower’s full financial position at the end of the forbearance period for a “permanent loss mitigation solution.” …

About

Brace

Software to Revolutionize Mortgage Servicing

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