Recently, the CFPB released a report examining the experiences of mortgage borrowers who struggled to make payments during the Covid-19 pandemic. For the report, the CFPB used a dataset from the 2020 American Survey of Mortgage Borrowers, derived from the National Mortgage Database. The report found that the most common challenges borrowers faced included (i) thinking they did not qualify for assistance programs; (ii) not knowing how to apply for them; and (iii) experiencing “too much trouble” with the application process. The CFPB also found many borrowers felt uncomfortable talking to their mortgage servicer and noted data and evidence that borrowers with limited English proficiency were more likely to face challenges.
The report also found that over half of distressed borrowers discussed their repayment difficulties with their servicer, and those who discussed these difficulties were more likely to receive offers for assistance (such as repayment plans or loan modifications). The most common topics discussed with servicers were forbearances, loan modifications, repayment plans, refinancing options and available government programs. Most borrowers who received a forbearance reported being satisfied with the process, but more than a third were unclear about what would happen at the end of the forbearance period and how to repay forborne payments. Some borrowers were also confused at the outset about how deferred payments would work after entering a loan forbearance.
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