CFPB: Mortgage Servicers' Pandemic Response Varies Widely

The Consumer Financial Protection Bureau (CFPB) published a report Tuesday detailing 16 large mortgage servicers’ response to the COVID-19 pandemic. The report’s data metrics include call handling and loan delinquency rates and highlight the industry’s widely varied response to the pandemic.

Many servicers, the CFPB said, handled high call volume with an average hold time below 3 minutes, while others reported hold times up to 26 minutes. The CFPB said it expects servicers to compare the report’s findings to their own internal metrics to identify opportunities for, and demonstrate concrete efforts toward, improvement.

“Many emergency mortgage protections are winding down, and servicers have had ample time to prepare for the millions of distressed homeowners who need their assistance,” said CFPB Acting Director Dave Uejio. The report “should inform servicers’ own data reviews as they determine whether they are doing enough for borrowers. Servicers who find themselves at the bottom of the pack should immediately take corrective steps. The CFPB will hold accountable those servicers who cause harm to homeowners and families.”

The CFPB used supervisory data from 16 large servicers to understand how they interact with homeowners during the pandemic and whether those interactions are effective. The key metrics monitored include:

• Call metrics, to understand how servicers managed the volume of homeowner calls. The metrics in the report include Average Speed to Answer (ASA) and Abandonment Rates (AR), a measure of how many borrowers disconnect from servicing calls prior to completion.
• Pandemic forbearance exit metrics, to determine the support provided to homeowners transitioning out of COVID-19 hardship forbearance programs. Many servicers saw increased delinquent exit rates in March and April 2021, and some servicers were clear outliers. For federally backed loans, 3 servicers, which used the same sub-servicer, had relatively higher delinquent exit rates for one or more serviced portfolios — consistently exceeding 50%.
• Delinquency metrics, to identify, among other things, variation of homeowner delinquency rates among servicers. Overall delinquency rates ranged from about 1% to 26% for both federally backed and private loans. (Differences in delinquency rates may reflect the differing composition and risk profile of each servicer’s portfolio.)
• Borrower profile metrics, to determine whether and how servicers track borrowers’ race and limited English proficiency (LEP) status.
• Pandemic assistance enrollment metrics, to understand the types of assistance programs offered to homeowners and whether homeowner applications to those programs were accepted or rejected.

The CFPB continues to encourage servicers to enhance their customer communication capabilities and outreach efforts. Servicers should educate and assist borrowers in avoiding delinquency and enrolling in widely available assistance and loss mitigation options. The CFPB will continue its oversight through examinations and enforcement, and will hold servicers accountable for complying with existing regulatory requirements, as well as the amended Mortgage Servicing Rules that take effect Aug. 31, 2021.

Read the full Mortgage Servicing Metrics Report here.