The COVID-19 pandemic has wreaked havoc on the U.S. economy in unimaginable ways. Millions are unemployed as a result of federal and state action to contain and limit the spread of the virus. The cascading effects of shutting down the entire U.S. economy have already been felt by both mortgage servicers and borrowers alike.
In an effort to limit the damage to certain borrowers, both federal and state governments have enacted laws, promulgated rules and issued guidance requiring or encouraging many mortgage servicers or lenders to provide forbearance options under certain circumstances.
According to the Mortgage Bankers Association‘s forbearance and call volume survey, the number of loans in forbearance has steadily increased to a total of about 4.1 million loans or 8.16% of servicers’ portfolio volumes as of May 10. This upward forbearance trend is likely to continue, so mortgage servicers and lenders should closely track evolving requirements and guidance to avoid potential liability.
Read the full article in Law360 here.