CFPB report analyzes servicer data on borrowers exiting COVID forbearance

Just 0.2% of mortgage loans exited COVID-19 forbearance programs with a status of foreclosure, short sale or deed in lieu, according to new metrics published by the CFPB today based on information reported by 16 mortgage servicers that together represent approximately one-third of the residential mortgage market. Most borrowers exiting COVID forbearance exited with a loan modification (27%), the bureau found, while 15.2% exited in a state of delinquency. A little over 6% exited COVID forbearance with a status of current, while 10.2% exited forbearance with their loan paid off and 8.4% had their loan reinstated.

In surveying borrower information, the CFPB found significant variation in how servicers were collecting information on borrowers’ language preference, noting that “the substantial lack of information about borrowers’ language preference and varying data quality made it challenging to make any comparison between servicers.” However, the report did find that “the number of non-[limited English proficiency]borrowers who were delinquent without a loss mitigation option after forbearance declined over time . . . while the number of unknown and LEP borrowers did not reflect the same decrease.”

The CFPB noted that this could indicate that LEP borrowers are experiencing challenges obtaining in-language information about available loss mitigation options, and emphasized the need for better data collection around language preference. The bureau also cautioned—as it has done previously—that “failure to serve LEP consumers could give rise to violations of the Equal Credit Opportunity Act, regardless of servicers’ data collection practices.”

Similarly, the report noted that servicer response to CFPB requests for borrower demographics, including “a breakdown of the total loans they service by race, and race information for forbearances, delinquencies, and forbearance exits” was limited, precluding comparisons. However, the report “encourages servicers to ensure that they are preventing discrimination in the provision of loss mitigation assistance.”

Finally, the report also examined call metrics from servicers on total call center inquiries, average hold times, call abandonment rates and average call handle times. The bureau noted that “overall, most servicers reported stable call metrics during the reporting period,” but that significant variations were observed between servicers, with some reporting significant spikes in average speed to answer and abandonment rates. “Borrowers may face relatively more challenges obtaining assistance over the phone at these servicers (or specific call centers at these servicers), particularly if ASA and AR remains elevated over time,” the report concluded.