Earlier this year National Housing Resource Center surveyed housing counselors from HUD-approved housing counseling agencies to describe their current experience helping homeowners in distress access loss mitigation options. Seventy-six housing counselors responded from locations across the country. Nearly 90% of respondents report seeing an increase in foreclosure prevention cases. Notably, nearly 70% of respondents report they are assisting borrowers with non-government-backed mortgages, either Private Label Security or Portfolio. These are homeowners that were not covered by the protections given to homeowners with government-backed mortgages through the CARES Act.
Job loss or income reduction, whether COVID related or not, is the most often cited reason for delinquency with an increase in costs and delinquent property taxes in second and third place respectively. Just over 70% of respondents reported they were dealing with servicer delays in completing loss mitigation/loan modification workouts. Repeated requests for documentation, long hold times, and servicer not responding to requests for information are the top three servicer delays noted.
We asked respondents to list the servicers who most often are causing these delays and to specify the type of delay. Thirty-two servicers were named and again, repeated request for documentation was the most often cited reason for delay. This illustrates the importance of efficient interaction between a homeowner and their servicer to ensure that no one loses their home due to incorrect information and improper delays.
Moving forward, servicers must ensure adequate staffing and be certain to properly train call center personnel. Every servicer should be required to provide escalation information for the NHRC servicer escalation list for HUD-approved housing counseling agencies to utilize.
The full survey report can be found here.