The House Financial Services Subcommittee on oversight and investigations held a hearing on Thursday examining how servicers provided clarity and information on the CARES Act and forbearance options for borrowers.

The discussion, titled “Protecting Homeowners During the Pandemic: Oversight of Mortgage Servicers Implementation of the CARES Act” also investigated disproportionately affected lower income households and communities of color.

Witnesses Alys Cohen, staff attorney for the National Consumer Law Center, Marcia Griffin, founder and president of HomeFree-USA and Donnell Williams, president of the National Association of Real Estate Brokers, were in agreement that a gap consisting of “incomplete and inconsistent” information regarding forbearance was occurring between servicers and American borrowers.

“Federal regulators must increase oversight and ensure mortgage assistance meets the needs of diverse communities of homeowners, improve regulations, including recent CFPB rules that leave homeowners at risk, and consider future reforms in the mortgage servicing industry,” said Cohen.

Several witnesses and representatives such as Rashida Tlaib of Michigan and Nydia Velaquez of New York said it was the responsibility of the servicer and the government to provide proper information and assistance – saying many borrowers in forbearance within their districts weren’t aware of the 180-day initial forbearance period or the up to one-year extension.

Andy Barr, ranking member for the subcommittee, and witness Ed DeMarco, president of the Housing Policy Council, were in agreement that servicers pivoted in a timely manner and were “better prepared and more nimble today than they were in past crises.” They supported the idea that it was more the responsibility of the borrower to maintain communication with servicers during periods of possible forbearance.

DeMarco said HPC members and other mortgage servicers extended forbearance to homeowners who do not have federally backed loans and began offering forbearance options before the passage of the CARES Act.

“From the outset of this emergency, HPC members have been committed to keeping individual borrowers and families in their homes,” said DeMarco. “We have been doing this in partnership with many others, including government agencies and federal regulators, Congress, nonprofit and community organizations, as well as other stakeholders, including those testifying with me today.”

All witnesses were in agreement that a history of systemic discrimination is being maintained in the housing industry. Williams said there is a 13% gap between Black homeowners and white homeowners receiving forbearance and urged Congress to allocate specific funds targeted to the preservation of Black homeownership.

“It is well documented the COVID-19 pandemic has had a crushing and devastating effect on Black homeowners, putting a deep economic strain on many Black borrowers who have worked hard to achieve the ‘American Dream’ of homeownership,” Williams said. “As of mid-June 2020, roughly 24% of Black homeowners reported some difficulty making their mortgage payments compared to white homeowners.”

Al Green, chairman of the subcommittee, proposed a department of reconciliation with the responsibility of dealing with racism in not only the industry but within the country that would report to the president and maintain a secretary of reconciliation. All members in attendance, except DeMarco, agreed the position should exist.



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