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The Right Tools for the Right Time: Here's How Improving Borrower Communication Can Help Prevent Foreclosure As Forbearance Ends
A change is coming, and mortgage servicers need to be ready for it. COVID-19-related forbearance will soon end for millions of homeowners. As it does, many borrowers will have questions about their repayment obligations. Borrowers who fail to meet these obligations may face a higher risk of foreclosure, something the Consumer Financial Protection Bureau (CFPB) doesn’t want to see.
Servicers need to communicate effectively to guide borrowers out of forbearance and back on track with their mortgage payments. Servicers must, for instance, contact borrowers 30 days before their forbearance period ends to discuss their repayment options. Missing this deadline is not an option.
Federal regulators have made it abundantly clear that servicers are likely to be judged based on the outcomes their borrowers experience after forbearance. Helping borrowers understand their options is one key to preventing foreclosure and avoiding unnecessary scrutiny from federal regulators.
Mortgage servicers can take several steps to improve communication and assist borrowers as forbearance ends:
- Communicate via multiple channels
- Provide educational resources
- Communicate proactively
- Take advantage of mortgage servicing software and web applications
Servicers need the right mortgage servicing software and effective self-service web applications to quickly deliver information to borrowers.