CUNA is increasingly concerned about the impact a large number of mortgage forbearances will have on the liquidity of mortgage servicers, it wrote to the Senate Banking Committee Tuesday for a committee hearing on the oversight of housing regulators. CUNA also called for guidance or clarity on several issues.
“The longer that mortgage servicers, especially non-bank servicing companies like credit union service organizations (CUSOs), are expected to deliver scheduled payments while the borrowers themselves are in deferment, the greater the likelihood that servicers will start to experience liquidity issues,” the letter reads. “We recommend policymakers act to provide a funding source accessible to mortgage servicers as the financial disruption becomes prolonged. We believe FHFA should support and work with Congress to create a financing program, or liquidity facility, for mortgage servicers in need of assistance in order to preserve their ability to respond to the unprecedented levels of payment forbearance required to help families affected by COVID-19.
“Credit unions have encountered an unprecedented number of distressed borrowers seeking assistance requests and flooding call centers. As forbearance requests increase, so too do the questions surrounding the process and procedures,” it adds.
CUNA recommends FHFA and the government sponsored entities (GSE) issue guidance and additional resources addressing the treatment of:
“Specific guidance on collections and servicing practices would also be helpful as lenders are attempting to comply with the myriad of executive orders and foreclosure and collection moratoriums/limitations regarding real property loans from various new state and local laws and regulations and federal government actions,” the letter reads.
CUNA also supports any down payment assistance, provided by the housing finance agencies, to enable minority and low- to moderate-income homebuyers to become homeowners.