Mortgage servicers should compare internal metrics to data in a recently released agency report to “identify opportunities for, and demonstrate concrete efforts toward, improvement,” the Consumer Financial Protection Bureau said.
The CFPB report’s data metrics include call handling and loan delinquency rates, illustrating the breadth of the industry’s response to the pandemic. The agency cited average hold time, with many servicers keeping it below 3 minutes despite high call volume, while outliers reported keeping callers waiting for as long as 26 minutes.
The CFPB used supervisory data from 16 large servicers to understand how they are interacting with homeowners during the pandemic and whether those interactions are effective. As of July 2021, more than 1.8 million borrowers were enrolled in active forbearance plans, the bureau said, with many set to exit forbearance this fall.
Call metrics in the report include Average Speed to Answer and Abandonment Rates, a measure of how many borrowers disconnect from servicing calls prior to completion. Most servicers reported abandonment rates of less than 5 percent during the reporting period, while others exceeded 20 percent, and one peaked at 34 percent.
The bureau looked at 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 percent.
The agency used delinquency metrics to identify, among other things, variation of homeowner delinquency rates among servicers. Overall delinquency rates ranged from about 1 percent to 26 percent 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 were used to determine whether and how servicers track borrowers’ race and limited English proficiency status. Nearly half of servicers in the report clearly stated that they did not collect or maintain information about borrowers’ LEP status, which may lead to borrowers not receiving needed language assistance. Some of the servicers also reported not maintaining data on borrowers’ race, which may raise the risk of fair lending violations.
The CFPB also looked at 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. Forbearance was widely available for borrowers with both federally backed and private loans, and the reported denial rates were consistently low for both loan types.
“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. “Today’s 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 agency said it will hold servicers accountable for complying with existing regulatory requirements, as well as the amended Mortgage Servicing Rules that take effect August 31.