While loan servicers can allow homeowners and landlords with mortgages backed by Fannie Mae and Freddie Mac to delay payments for up to a year due to the coronavirus, they haven’t been able to keep up with the demand from borrowers.
The Mortgage Bankers Association reported Tuesday morning that mortgage forbearance requests had increased by 1,896% between March 16 and March 30. This is an uptick from the week before when forbearance requests jumped by 1,270%.
Hold times for calls jumped to 17.5 minutes from under 2 minutes just three weeks ago, while the percentage of callers who hung up hit 25% from 5%, according to the MBA.
“Lenders across the board, they’re doing the responsible thing in that their employees are working from home like the rest of us, so the typical efficiency of servicers is now down 25%, 30%,” said Federal Housing Finance Agency Director Mark Calabria. “They can’t handle the call volume.”
But it isn’t simply employees working from home that has led to lower efficiency. Calabria added that the majority of the call volume — up to 80% — are from borrowers who aren’t suffering a hardship related to COVID-19.
“I would ask if you’re not facing a hardship right now, if you haven’t lost your job, at least wait a week or so,” Calabria said. “We can get through the first payment at the beginning of the month where we can help the people who need help.”
While lenders are overwhelmed by inquiries, Calabria said that the upcoming weeks may bring a wave of digital solutions to loosen up the bottlenecks.
“The lenders I’m talking to, many of them also tell me they’re about a week away from a digital solution where all of this can be done online,” Calabria said. “So I would say and ask, really, if you don’t need help today, please don’t call.”
There are concerns that if borrowers continue to miss payments for half a year then FHFA will have to rescue Fannie, Freddie and lenders.
“We’ve got…a sustainable path for two or three months,” Calabria said. “If it goes beyond that, we may need to have Congress or others step in to provide a little more support.”
In an effort to lessen borrower stress, Calabria added that lenders are trying their best to tack on the missed payments at the end of the loan. He also remained optimistic about the future.
“Most of the borrowers, we’re hoping that when the economy gets going, [they] start their job again,” Calabria said. “So if this is a temporary time, I think this is manageable.”