Loss Mitigation

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.

Survey and Tools to Strengthen Your Delinquency Counseling

Housing counselors are always the "canary in the coal mine" for emerging consumer issues. When we asked for your feedback in the beginning of the Pandemic, your answers served to change the narrative. At the time, servicers were touting that homeowners would be able to easily access assistance with the new CARES Act Forbearance option. Your answers showed that it wasn't as easy as it seemed, and call center representatives were giving inaccurate information to homeowners. Right now, information is being circulated that indicates mortgage delinquencies are at historic lows. While we certainly hope this is accurate, we want to hear from you to be certain we understand what is happening at a grass roots level. To do that, we’d like to get your feedback by way of this survey. Please fill it out as soon as you can but no later than July 22nd. During the Great Recession, housing counselors helped millions of homeowners navigate the loss mitigation process. Homeowners were experiencing long holds when trying to contact their servicer by phone, getting repeated requests for documentation that had already been submitted, and hearing answers from call center representatives that were at the least misleading and at the worst completely incorrect. In too many cases, homeowners ended up losing their home to foreclosure because of these servicer related issues. Housing counselors stepped up and were able to ensure that homeowners were getting the help they needed and were entitled to receive. One key tool was a list of servicer escalation contacts specifically for housing counselors to use when they saw that the usual channels for loss mitigation were not working properly. The escalation contacts offered an avenue that [...]

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