Transcripts For CSPAN2 Hearing On Mortgage Relief During The Coronavirus Pandemic 20240712

I would like to call the meeting to order at this time and i would like to, if i may, give just a brief overview of what you can expect. We have called the meeting to order and there will be an Opening Statement of the chair and Opening Statements of the Ranking Member, Opening Statement from chairwoman waters and witnesses will be introduced and they will give their Opening Statements and we will have q a and adjournments. The title of todays hearing is protecting homeownerss during e pandemic, oversight of Mortgage Services, implementation of the cures act and without objection the chair is authorized to declare a recess of the subcommittee at any time. E. Also without objection of members of committee who are not members of this subcommittee may participate in todays hearing for the purposes of making an Opening Statement and questions of witnesses. Members are reminded to keep their video function on at all times, even when they are not recognized by the chair. Members are also reminding that they are responsible for muting and on meeting themselves. I think this is something that is worthy of repeating because i had made the mistake of not honoring this responsibility. I hope i dont make that mistake today but members are also reminded that they are responsible for muting and on meeting themselves. De to mute themselves after they finish speaking. Consistent with the regulations accompanying rise h965 staff will meet members and witnesses as appropriate only when they had not been recognizedhe and to avoid inadvertent back ground noise. Members are reminded that all house rules relating to order and decorum apply to this remote hearing. The chair now recognizes himself for fourr minutes for an Opening Statement. Let me start by thanking the chairwoman of the full committee and it is always an honor to serve under the leadership, madisonn chair. I like to think the raking member for the participation that t he has brought to this meeting. Id like to also t thank the stf for the hard work that you have done in obtaining some 4000 pages of servicer documents and this would include a policies for feature and data on the largest 11 services and they are findings that include the fact that over 2 million forbearance requests have been approved by these 11 servicers and this was done between march 27 and june 30 of 2020. Weve also foundsi things that e causing a bit of consternation and often servicers failed to provide borrowers with the 180 day forbearance that has been set in the cares act and too often borrowers were given 90 days. I have some evidence of this failure to complyy that i shall share with you. This evidence is something that emanates from a request by a constituent. One of my constituents has brought to the attention of our office that this document that is styled temporary hardship forbearance plan agreement and i wont go through it in its entirety but the important points are these this borrower faced a hardship and has had payments deferred for three of the payments that are due, three payments and the amount due is going to be in the final analysis at the end of the deferment time and the amount due for all payments within that deferment time and any late fees that may have accrued from other sources of payments not to be made. The point is this, as it reads on this document the amount due on the next payment due date which was three months away from the date that the deferment time started includes the amount of payment being deferred under the plan. This is 90 days of deferment and not the anticipated 180 days that the cares actay affords borrowersct and in fact, many of the borrowers are not made aware of this and we signed pursuant to some of the testimony you will hear today that many of these borrowers who are accorded this 90 day time as opposed to the 180 days they are borrowers of color. It seems that this is like many other things having a disproportionate impact on persons of color which causes me a good deal of consternation, i might add. I would also say this this program that we established in congress has been received by the persons charged with according to this Forbearance Agreement and the servicers and have been received by them as an honor system. Ween never intended for this toe an honor system that would allow them to decide whether or not they would accord persons 180 days with the additional 180 days to extend but it was my intent that borrowers would require that 180 days and opt to have an additional 180 days. The remedy seems to be that of having to file a lawsuit, litigation,su hire a lawyer, hae to take this to court. Have to have some time that might go beyond a period of time, quite h friendly, you anticipate having forbearance. Im very much concerned about this and my hope is that we can get a means by which we can deal with this honor system and bring this under the auspices of a situation such as they will have to comply as opposed to choose whether or not they will comply. With this having been said it is with my honor now to recognize the Ranking Member of the subcommittee for a fiveminute Opening Statement, as Ranking Member you are not recognized for your Opening Statement of five minutes. G thank you, chairman green. Good to see youma and all our countries colleagues and witnesses, we thank you again for joining us virtually for todays hearing. Coronavirus pandemic and associated government imposed shutdown of the economy disrupted the lives and livelihood of citizens across our country. Businesses shut down, unemployment skyrocketed, workers remain employed based on certain prospects for their longterm stability and families were at risk of losing their homes. As you all know Congress Passed and the president signed into law the cares act which helps individuals and Small Businesses and created forbearance options for struggling homeowners. At the peak of our proximally 4. 7 million families were in forbearance and many more families were undoubtedly have lost their homes or struggle to make payments and if not for the swift and decisive response from congress and the administration. The limitation of the paycheck protection program, Economic Impact payments and the Federal Reserve lending facilities under 133 which opened credit markets and other assistance programs under the cares act made it easier for homeowners to pay their mortgages and families to stay in their homes and Small Businesses to build a bridge or the other side of the crisis. Fortunately, we have seen a number of mortgages in forbearance decrease since the peak and declining a full 13 since may however, we are not out of the woods yet. There are still millions of homeowners facing hardship and acquiring additional assistance. I hope to learn from our Witnesses Today what may be helpful next steps as congress contemplates the next traditional legislation for farreaching aid to america in homeowners with a collaborative effort between congress, and menstruation regulators and the private sector. It is important to note that while the cares act mandates the servicers of federally backed mortgages for forbearance options to borrowers that same requirement is not in place for the loans held in private labels securities. Despite the absence of this mandate however servicers of these non federally backed loans stepped up during this crisis and offered similar forbearance terms for their borrowers to have cares but they showed that in times of crisis the government and the private sector can Work Together and that thehe private sector is acting responsibly in the interest of homeowners without having government mandates imposed on them. Unfortunately, my colleagues on the other side of the aisle believe that a topdown mandate on all servicers would be more effective. The partisan heroes act included a mandate to automatic forbearance for all borrowers struggling to pay their mortgages and not only does this mandates appear unnecessary given the Market Dynamics we have seen to date but it has the potential to further disadvantage borrowers by limiting their options. On may 4, chairman waters and chairman greene sends letters to some of the largest Mortgage Services requesting information about their interaction with customers following the passage of the cares act. The implication of the letter was that mortgage servicers skirted their responsibilities under the cares act or somehow profited by steering their customers into forbearance but not in the best interest of the borrower. The data the majority received in response to that letter hold a very different story. They demonstrated servicers are working well with borrowers in their times of greatest need. This hearingng is, this is a hearing in search of a problem. That is not to say that there werent hiccups along the way. There were understandable growing pains and bumps in the road as servicers stepped up call centers, updated website and it lamented the Necessary Technology to help their customers. However, given the scope and scale of the forbearance request and the short timeframe to implement new processes the servicers overall should be commended on their treatment of borrowers in a time of crisis. I think the creditors, the creditors and the servicers have learned from experience that the expanse of foreclosure and repossessing these properties did not or is not in anyones best interest paid keeping homeowners in their homes is in the best interest of all involved and particularly those struggling americans who need help. I look forward to further exploring how servicers work with their customers and the efficacy of the cares act provision and keeping families in their homes. What additional actions may be required by congress and potential areas of improvement in the service or borrower relationship and again i thank all of you for being here today and thank you chairman greene again and chairwoman waters for holding this hearing. She asked to unmute. You are still on mute, madam chair. All right, you can hearr me now . Thank you. Mr. Chairman, i am appreciative for you holding this hearing ana i took my seat i heard you read something where there appear to be a demand from a servicer that was a demand for what would be considered a full payment for the month that had been missed. Is that true, mr. Chairman . May i make sure i have the information correct. Is that true . I guess the chairman is not hearing me. In my unneeded . Can you hear me . Hello . We can hear you but he is muted. I am unneeded now i believe. Can you hear me . Now, i can hear you. I just wanted to make sure i heard what i heard you saying is that someone had been demanded to pay the full amount of the missed payments that was about four months do, is that correct . Three months of forbearance, yes, maam. It would be payable on the end of the three month time. Thank you. I wanted to make sure i had the affirmation correct with mr. Chairman, this is precisely what we want to avoid. As a matter of fact i have to say to mr. Barr the experience that he had starting in 2004 with the foreclosures that took heace with the products that were placed on the market and with all of what caused us to experience this actor in ourcl community because of these unprecedented foreclosures leads us to understand what we must da to avoid homeowners losing their homes. And so, i understand my time is up but mr. Chairman, i want to thank you for the hearings and i am absolutely committed to the proposition that this will not happen and that we are going to have incredible forbearance and situation for our homeowners that will not cause them to lose their homes but i yield back the balance of my time. The chairwoman yields back. At this time i would like to introduce our witnesses and thank them for coming and being a part of this hearing. He we have with us today elise cohen, staff attorney for the, marcia griffin, founder and president of homebrew usa. Darnell williams, President National association of Real Estate Brokers and the president of Housing Policy Council. Welcome again and thank you for being with us virtually and the witnesses will be recognized for five minutes to give each an oral presentation if they would be a time will go off at the end of your time and i will ask that you respect the members and other witnesses time by wrapping up your oral testimony. Without objection to the witnesses written statements will be made a part of the record. Once the witnesses finish their testimony each member will have five minutes to ask questions. With that, esther cohen, you are now mechanized for five minutes for your Opening Statement. Ut thank you very much, chairman greene, Ranking Member bar and members of the subcommittee prayed thank you for the opportunity to testify today. I testify on behalf of the low income compliance of the National Consumer law center as well as a 20 other Consumer Legal Services and civil rights organizations. The unprecedented coronavirus pandemic has brought illness, death and un appointment and greater economic insecurity to people across the country and communities of color particularly black and latin asked people have been especially hardhit. Preexisting inequalities are exacerbated by the Current Crisis and black and latin x homeownership is in peril. To mitigate some of the harm wrought by them pandemic congressmen continued vigilance in protecting homeowners to improve transparencies for housing relief programs, increase its efforts to regulate and reform the Mortgage Servicing industry and release for black and latin x homeowners paid federal regulators must act as well to prevent avoidable foreclosures and promote sustainable homeownership. Congress must pursue dedicated efforts to protect and expand black and latin x homeownership and pass additional measures, including election of loan level borrowers, performance and loss mitigation data with free public reporting. Representative, hr 635 is a good start on this. G expansion of cares act protection must include standardized forbearance for all mortgagesde a, automatic forbeae for borrowers who have missed two payments or more and affordable repayment options for borrowers exiting forbearance plans and are seeking to resolve delinquencies that are available prior for foreclosure. Written notice and in language information for limited English Proficient borrowers a moratorium on negative credit reporting, targeted support for the hardest hit communities, including funding, legal services, housing counseling and cash assistance for delinquent borrowers and measures to prevent neighborhood blight. Moreover, federal regulators must increase oversight to ensure mortgage assistance meets the needs of Diverse Communities of homeowners, improve regulations,io including recent rules that leave homeowners severance and consider future reforms in t the mortgage servie industry to align incentives with those of homeowners and investors but we commend the right literary extension of the foreclosure moratoria in the recent announcement to extend loss mitigation options and the expansion of forbearance options. More is needed. Latin xe homeowners are more likely now than white homeowners to struggle paying their mortgage or seek assistance from their servicer and missed payments instead of received forbearance. While all homeowners are more likely to report missing payments rather than differing payments through their servicer and the Census Bureau home survey at the end of june four times as many black homeowners reported missing payments as compared to differing payments among hispanic or latino homeowners and homeowners who identified as other t were reported two or more races were two times as many homeowners reporting as they had missed payments as compared to deferring. Only 1. 4 times as many white homeowners reported missing rather than differing payments. How can we help homeowners would not yet received assistance . What can we do for the disproportionally large borrowers of color facing this challenge . While we focus today on efforts to contain the fallout from the dpandemic we should not lose sight of the fact that for many distressed borrowers the Mortgage Servicing industry remains fundamentally brokenng. Our ability to prevent another great loss of Home Ownership for black and latin x families depends on our ability to have Services Received that perform the ball servicing well and its in their interest as well as the interest of financially homeowners in their community and the economy. Our nation is facing unprecedented challenges that presents us with a real chance to look at our priorities and assumptions and make material progress and how we measure success and inclusion. Thank you. Thank you for your testimony, ms. Cohen. Ms. Griffin, you are now recognized for five minutes for an Opening Statement. Thank you very much. My name is Marsha Griffin and i am president and founder of home free usa, a nationwide hud approved Housing Council. I appreciate this opportunity to appear before you today to provide firsthand insight surrounding the plight of homeowners in this pandemic. Allow me to emphasize the importance of housing Counseling Organization which i would like to call a nonprofit homeownership providerr hud approved Housing Council organization like home free usa our Mission Based entities created to provide everyday people with the tools they need to achieve and sustain their housing and homeownership goals. We hope renters to become sustainable homeowners and help existing homeowners avoid Mortgage Delinquency and foreclosure. We are somewhat like marriage counselors prayed when a homeowner has unanswered questions, needs credit help, doesnt know what to do, doesnt understand the service or jargon we bring them together with lenders and services to ensure that everyone is on the same page with the goal of the course of finding a mortgage solution that works for both parties. According to the u. S. Congress joint economic committee, the average foreclosure cost everyone 77934 dollars. Lenders lose an average of between 12 and 19 of the homes in foreclosure and they spent ecabout 50000 in the process. If counselors are able to prevent foreclosure the value to lenders, investors and the country is enormous. What have we seen in the market today . Calls come in daily from homeowners who are exhausted, paralyzed by fear, covid sick and have lost their jobs. Everyoneha is concerned that thy will lose their home. First, and my work at home free usa with my colleagues at the National Housing Resource Center we do believe that services have improved since the start of the pandemic but many still need other trained customer based employees and some Call Center Employees reach script that they are not familiar with, dont have time to answer questions and are just not familiar enough with the process or procedures to assist consumers. Second, counselors assist homeowners who areen improperly denied forbearance and we have seen troubling concentration of this issue with veteran loans and we are also seen homeowners who may have recently completed a loan application and they also have been denied of borrowers who have just missed a payment in march of february and they also have been denied. Furthermore, we help homeowners who have requested a forbearance still havee questions about whether it has been approved and how to plan ahead for repayment. There is a frustratingly large number of homeowners who are unemployed but still being told that lump sum pavements are not due at the end of the forbearance. Other occurring issues are highlighted in my written testimony, whether right or wrong, too many of our clients on familiar with the terms in the service or script. The only compounds the existing sense of distrust and fear of the Banking Industry and people of color are particularly vulnerable to the sense of distrust of lenders and services as a result of the most recent experience in the last housing crisis. People of color rely heavily for organizations like home free usa to advocate for them, what can be done . First, services do not have the capacity to handle individualized reports of vulnerable homeowners and it is essential that Housing Councils are supported so that we do not have to turn away and single consumers and thus bringing a services because we can handle the most challenging cases. Second, we feel that the fpd and f hfa and hud should be more solutions and proactive in their monitoring of repayment issues. We feel the federal agencies should coordinate and identify Realtime Solutions and actively update policies and procedures. P third, we need a streamlined loss mitigation loan procedure like we had with hemp. The biggest problem we have would be homeowners who return to work but have significant t reduced incomes that would bea need for aggressive and affordable Loan Modifications for these borrowers. Housing counselors are capable of helping homeowners and servicers service through these, gated processes. Last, more outreach is needed. Consumer awareness of options and processes need to be better distributed. I very much appreciate this opportunity to illuminate our concerns about covid related siMortgage Servicing and the importance of housing counseling intervention and to sound the alarm that the worst is yet to come. Part of the Counseling Organization can prove and play a huge rolls. The lady will have to wrap up her testimony please. You have exceeded your time. Thank you. Thank you for your testimony print ms. Williams is now recognized for five minutes for an Opening Statement, mr. Williams. Mr. Williams, you may have to unmute. I apologize. Quite all right. Please continue. Chairman green, Ranking Member bar, chairwoman waters and established members of the committee, thank you for the opportunity to testify today to discuss the importance of o protecting homeowners especially during these difficult times. I also want to thank chairwoman Maxine Waters for calling this evening. My name is Donell Williams and i serve as the president of the National Association of Real Estate Brokers b in the countrys oldest and largest black real estate trade association. Founded in 1947 our Mission Democracy in housing has guided our efforts to ensure fair housing practices and in neighborhoods across the country. This is especially in communities of color but am also the owner of [inaudible] realty, Brokerage Firm headquartered in morristown. Covid19 has disproportionately affected black homeowners. It is well documented that covid19 pandemic has had a crushing and devastating effect on black homeowners and caused mass on employment with a deep economic strain on many black borrowers that have worked hard to achieve the American Dream of Home Ownership. Midjune 2020, roughly 24 of black homeowners reported some difficulty making their mortgage payment compared to white homeowners. There is a 13 gap between black homeowners and white homeowners receiving forbearance under section 4022 of the cares act, which allows borrowers to apply for a forbearance period about the 360 days. Conclusion, nor to address the challenging, challenges facing black homeowners as a result of the pandemic, it is result of the pandemic it is an is that Congress Take action to enjoy the congressional and governmental efforts to maintain and include black homeowners. We urge congress to take the following action and allocate specific fund is targeted to the black homeownership. Number two, provide assistance for mortgage borrowers not covered by the act pricing mortgage lenders to be required for Government Support to developers debate co borrowers. Number three, reply your fha and all servicers to notify borrowers in aller communicatio, including mail, electronic communication and phone call if they are liable for her parents. Require all services to have winds. Staff are knowledgeable about thewl proceedings. Number four, create a largescale public initiative. Federal government is allocating resources to make Public Awareness about the health riski associated into similar effort should be made to inform borrowers of their rights. Number five, in short fha borrowers continue to have the same access to the mortgage forbearance protections financial relief. In conclusion the National Association whose members are known as realtors stood for democracy and power and the guardians of the communities they serve. We will continueeve to ask for e sustainability of Home Ownership for black americans and all e americans. Into the option of the real estate and for congress to align the declaration of a cease and desist. Thank you for the opportunity to testify before the committee today and i will be glad to answer questions. Thank you. Thank you for your testimony mr. Williams. Mr. Marco, you are recognized for five minutes for your Opening Statement. Spinach and cream, Ranking Member,taan chairwoman rogers ad members of the subcommittee thank you for inviting me to testify on how the mortgage servicers are responding to the challenges facing the home owners because of the novel coronavirus. Any home owner of the economic distress resulting directly or indirectly on the pandemic. Also, while anyone vulnerable to the virus the health and economic costs have disproportionately affected communities of color and lower income households. From the outset of this emergency, Housing Policy Council members and other mortgage servicers have been committed to keeping the individual borrowers and families in k their home. My written statement covers topics that i will briefly summarize here. First, the challenges facing phone owners today are not the result of the underwriting standards or inappropriate business practices. This pandemic is a National Health crisis and the steps taken to combat it had Enormous Economic consequences. In response, each number in and other mortgage servicers shifted virtually all of their operations of call centers and Office Buildings to their own homes to train their staffs remotely and modify technology to manage the enormous influence of the borrower inquiry and set upnd automated tools to educate them and request Payment Relief and began offering forbearance options before the passage of the care act and extended forbearance to homeowners that do not have federally backed mortgages. Against the announcements and various agencies nearly 4. 8 million households were on a forbearance plan and then declined 13 since then. According to the Financial Services, 12. 3 of the fha were in forbearance and 7. 1 in forbearance. Services of these loans or required by the act through a customer that asks for it claiming covid19 partnership. If the nonfederal backed mortgages, 9. 6 of such were also in forbearance by late may. Even banks portfolio loans and private lenders securities. This is an indication of c the Portfolio Lenders and other investors have also responded without a federal directive providing Payment Relief and lieven greater rate. I want to recognize that that is marked in the last four months. Not only has the industry been trying to Work Together to develop best practices but its been joined in partnerships with numerous other organizations and stakeholders and agencies and regulators. These partners demonstrate concerns in the financial situations that have been disrupted by the National Health emergency. I believe it is because of the communication and coordination that release has been provided to so many so quickly. And the transition to the longerterm solution requires dedicated efforts to ensure the best resolution. The sooner they begin repaying their mortgage, the sooner he or she resumes the opportunity the Home Ownership provides. When a borrower is ready to resume payments, the borrower contact is critical for the seamless transition and tohe ensure uncertainty among all of the parties regarding the repayment. D the options available are dependent on several factors in some based on the borrowers circumstance. Generally the options including shortterm repayment at the end of the loan or allowing the Outstanding Payment into the loanut balance and other findins alone. Its a forbearance act congress has already taken the cornerstone action to assist the borrowers and services that recognized its negatively affecting many consumers and communities into some of the beneficial stimulus provided under the act is coming to an end. As we support additional measures by the congress to provide fiscal stimulus to hardhit consumers and communities. Thank you for inviting me to participate today. Thank you for your testimony. I now recognize the gentleman from california for five minutes for questions. Thank you very much,y chairman reed. I want to thank all of the witnesses that are here today. I know of their work. Ive worked with them over the years. They have been helping homeowners and im very pleased that they are all here this morning. But here is what i would like to do. I will ask each in the time that i have whether or not the xalanguage is doing exactly what they needed to do. We have provided the right to request forbearance on mortgage payments within option of six months. I think there was some information shared with us about the fact. What can we do to make sure and i would also like to know should there be additional language about the loan modification wonderful. Thank you. They definitely support the act. This is great progress and also it helps to bring in some of the issues we are seeing in the progress of nonfederal loans. We are very appreciative of the suggestion of support, supplemental support for housing counseling. Its very much needed. The focus on repayment and forbearance is good and we should certainly continue. We have spoken about our views also in our recent testimony did yodo think we need Additional Information . Thank you for the question, chairwoman waters. Your question sounds like its focused on whether people need one more year of forbearance. The act has a lot of possessions and we hope to see the senate take up Something Like that to look at the issues and find a way to get something done. With regards to the specific question as you heard him say not a long time ago, people need to transition and so what we would like to see is legislation and programming to help people get into repayments. Now of course if the financial situation in the country and we may need to reevaluate data. That. But at this point, what we would like to see and what is in the act and Senate Legislation is more affordable options that are mandatory. I think that we talk about the same thing when we talk about the repayment options youve given me advice and point out a few things you think we could do additionally. What should we do to make sure that this process works . The need to have information out to the community and that can be done with trusting information any other kindf of way. That would be great through email, what have you. We also have the Data Collection is the ftp. I have a borrower in township new jersey tell me that they only gave their threemonth. Periods connected you think we should have some penalties for those that violate the law i thank you for your testimony here today. Myield back the balance of time. The gentle lady yields back k and the Ranking Member is recognized m for questions. Thank you mr. Chairman. It speaks to the very important need a. Based on the testimony so many have offered here today. Let me start with a question for doctor demarco about the non federally backed mortgages. I think your testimony was that for those non governmentbacked mortgages, those mortgages actually they are experiencing a higher forbearance rate what does that tell you about the marketplace and how it is responding without the heroes act . Its telling us a couple of things opposing the provision had been implemented for the federally backed mortgages is a sound approach to dealing with this kind of situation and the servicers that arear not requird or utilizing thehe same tools ty are recognized in this situation the payment forbearance is an appropriate response to assist the borrowers and in fact they arere doing that whether they ae required by the careless act or not. So this has truly developed into the best practice as being utilized by servicers and non federally backed mortgages and as you and i noted in the greater rate than practice. The heroes act passed without any republican support and some options for homeowners experiencing difficulties both apparently the authors of the heroes act believed instituting for the borrowers and limiting loan modification. Doctor demarco, how this impacted the ability to work with their customer and would it help or hurt American Families trying to stay in their homes and in that question could talk about the importance of communication between servicers and borrowers . That is actually where i was going to start. I understand the intention behind the automatic forbearance opportunity for borrowers, but theres actually i suggest something more important that comes out of the work that congress did in the dodd frank act thats been implemented that was also part of the development of servicers practice and that is the importance of timely communication between a service or in their customer if you are having problems paying their mortgage. We dont want to wait 60 days if they havent had a check and put them on forbearance. The servicers should want to be in contact with customers before you get to 60 days and want to understand the customers situation so in a timely way they can deliver an appropriate support to get the home owner back on their feet. For example they may have missed two months of payment for having nothing to do with an economic disruption in the pandemic but for some other reason of service or wants to get in touch with that and find a reason and it dissolving that particular problem thats why we would such as theg idea of making sure the service or is actually staying in contact with the customer and the customerce stays in contact with the surface or is going to yield a better outcome for the situations we are going to see here. My time is almost expired but its important to recognize different homeowners face different difficulties and onesided anonceive been alwayn you get folks w to repay quicker we should do that and finally coming around what we did in the act or how much forbearance requirements is allowed, nothing can replace getting people back to work and getting kids back in school so people can take care of their mortgage obligations. So thank you and i yield back. The time is expired into the chair recognizes the chairwoman on diversity and inclusion you are recognized for five minutes ofha questions. Thank you. Can you hearea me . I can. It is my honor to be on the committee and to the chairwoman servicesnancial committee, congresswoman waters and to the Ranking Member. First to the witnesses thank you for your time y and testimony. My first question im going to try to get through several questionsan so if i put my handp that is because of the timer. My question is for you as you knowhe the act is very explicit about the Protection Congress intended for the home owners. Borrowers experiencing Financial Hardship were to be provided to forbearance for 180 days with the possibility of an extension forio another 180 days despite ive gotten calls and they are confused about what the law said and the constituents mortgage servicers were offering. As you know we passed the act. Can you tell me despite the confusion in the marketplace that we all knew about where was the cfp that has oversight of the industry and why did it take us until june . Thank you for your question. In terms of the complaints that you are hearing we do have some good protections and regulators need to step up their game into greater oversight in terms of the cf tb they spent most of their time relaxing regulations and providing advice for home owners. Do you think they should have been doing more . Who people are still hurting and have oversight yes or no . Who they should do more starting with making sure people dont sface foreclosure. Let me move on to the next question. Earlier in the week and maybe youve seen this article entitled discrimination which found that they halted or solved at leastst six investigations io the recommendations of their own career staff. This is the same time and agency was working to undermine and water down the act that was supposedd to protect against the kind of discriminatory lending. There is an article out there that they found patterns of discriminatory lending against africanamericanspo and latinosn several lending institutions and areas aroundse the country and also listed other things. Many of the lending institutions identified in the article are members of those associations. Can you tell me your response to this and what are you doing to ensure members are not perpetuating the social and economic injustices African Americans and other minorities continue to face . I am not aware of the article so i am at a disadvantage there but i would say look, i certainly would be concerned about those issues and im sure any number of companies namededn the article that they are looking at what is going on here. I would be happy. Mr. Chairman i would like to request the committee uses its powers and resources as necessary to maintain a document related to the previous lending discrimination investigations and seek the positions of Senior Leaders including the director himself to get to the bottom of wese allegations. Weve been hearing them, its been talked about and im sure you are familiar with the article. My time is up and i will yield back. The request is noted. The chair now recognizes the next n the gentleman for questis for five minutes. Thank you mr. Chairman. Can you hear me . Thank you to the witnesses i appreciate the testimony of a. I appreciate you holding this hearing. I had the honor and privilege that covers most of the polk county. Affordable mortgage options are essential to myry constituents. We are here today to discuss mortgage servicers to play a role in mortgage finance. April 10 i spearheaded a letter with other members of the committee. It highlighted the need to ensure adequate liquidity to the Mortgage Servicing because the Residential Mortgage servicers were obligated to advance payment to investors municipalities and insurers whether the borrowers made the owpayments were not. L if they fall behind on payments then its their role to work witho the borrower and find ways to get them back on track and the modifications. In the act congress decided a nationwide program was needed but it is important that the steps were taken. Mortgage servicers have a vital role to play in helping borrowers cannot shoulder the government actions to protect those impacted if they do not have access to the needed liquidity to execute on those actions. Im pleased federal agencies have focused and continue to work with servicers. The issue died in and the instructions have helped guide the discussions and additional may have providedde assistance dealing with those in the forbearance of. Meanwhile onne april 24 they called for the mortgage servicers to waive the fees and place the homeowners in a forbearance as soon as a payment is missed whether or not the action is requested by the homeowner. Sure the borrowers he enrolled in a forbearance or is it better to speak with his or herer serve for regarding the best options for his or her situation . Hispanic its definitely better to speak with their service or industry have any issues totg explain what those are into the service or may work with the borrower to determine what is the appropriate and best course for that particular circumstan circumstance. Because the subject came up twice will do it quickly. They should try to talk to servicers and as i stated before, more are not seeing their mortgages than our making the arrangements for the servicers according to the census u bureau. People who are already late have taken a hit on their credit. Thank you. The takeup rate seems to have leveled offff for now. What is your assessment of the liquidity i situation . Spin everything as a result of the action that you mentionedra particularly as well as action by the Federal Reserve the liquidity situation has stabilized and the interesting thing here despite the action that the guard rails or limits around the servicers liquidity responsibility on any given loan enabled the private markets to step in and provide additional liquidity than we had greater certainty about what the rules of the road were going to look like and what the duration was going to look like. We still believe they can and should be ready to step in as needed if it turns worse again. My time is running out and i want to thank the witnesses for being here. Its great to see all of my colleagues and i hope you and your families are healthy. Thank you for what you do to make the hearing possible and for your services i will yield back. Yield back. The time is expired and the chair now recognizes the chair of the task force on Financial Technology for five minutes for questions. Thank you. I appreciate you holding this hearing mr. Chairman. I guess i like to look further out when we hopefully will start to come out of this lockdown especially in the southern states. What does the transition look like a in terms of recognizing the inability and the tremendous pressure thats been put on the homeowners and local community banks. What does thean transition look like to get us back to where there is opportunity for people to catch up on their mortgage payments in some cases reengineering some of those that have beendu out there or reconstituting a those that are inadvertently falling behind. Howw does that all come togethr and is it the mortgagese service or . Obviously they have obligations to the shareholders so im a little bit unclear about how we can reengineer this in a way that doesnt put the homeowner at severe risk. Lets say the president polls the emergency status and by executive order mike and all of the support and relief weve been providing. What does that look like and how do we help people transition slowly back to some sense of normal . I would be glad to take a crack at that, congressman. 4. 8 million households in forbearance you can imagine not everyone is going to come out of forbearance in the same situation. Over the last few i think theres been a lot of development about refining the guidelines for what that postforbearance looks like but it can simply be boiled down intohe broadly speaking for a borrower that comes out of forbearance and has the capacity not just to continue to pick up their mortgage payment, they may determine they want to be on a short term payment plan and get caught up faster. A lot of them if they get back to work they can resume the pre pandemic mortgage payment that they cant pay more than that. In that case its going to get added to the end of the loan and so for those whose income is permanently disrupted we are going to be able to do a loan odification where they can get caught back up by reviewing the low usage alone modification terms. You dont anticipate an objection on the part of some of the shareholders that do payments from the mortgage servicers you dont expect any action we would have to take in order to make that happen. Im happy to have you answer. What baseball and the last crisis and we continue to see as you said they are beholden to the guidelines from the investor is so whats the weather like is to be a safe harbor for the marketers from an investor liability so they can provide flowed modifications along the line the other agencies can provide that are sustainable. I would add these issues are unprecedented and we dont know whether they will be affordable to enough people. That is what i wanted to know in case we needed to create a safe harbor to allow a break to some of the mortgage holders we need to collaborate on that and i think that would be a win all the way around. Thank you very much and i will yield back. The chair recognizes the gentleman for five minutes for questions. Thank you chairman and Ranking Member bar and to the witnesses for testifying before owe committee today. Currently approximately 4. 1 million home owners are in forbearance plans. Some due to the uncertainty surrounding covid19. A large number continue to make payments even after requesting forbearance. That number has dropped between marchh and june. Back in tennessee folks are ready to get back to work and i believe we need to do so as quickly and safely as possible. Why did to some people opt in to forbearance that continue to pay downnt the principal . Hispanic i am not sure there is one explanation for that. In some cases it might have been a timing issue. They were not sure whether they got the request in time for the first month. Other cases its the majority they were not sure what the Economic Situation was going to be. Maybe they had a love of uncertainty and wanted to get on forbearance quickly and once realized the circumstances were okay they entered forbearance or maybe others needed it. I think theres multiple reasons. Are there any adverse consequences . You are supposed to have an Economic Hardship resulting in order to have the forbearance but if you continue to make your mortgage payment know there is no adverse consequence. Do you believe getting american safely back to work im sorry . Do you believe that it would decrease the number of borrowers who need to be in forbearance . The more people we get back to work the viewer will need forbearance, yes. The carers acted required those experiencing trouble due to theer pingback. Those provisions only covered however federally backed loans. How have the private servicers changed their practices to help keep the families in their homes . They are generally doing the same thing as the servicers of the federally backed mortgages. Offering mortgage payment forbearance to customers and declare they are having a Financial Hardship due to the pandemic. As a result its greater. Interesting. One thing i want to point out his most private servicers if they have an investor that they are servicing for, they are advancing payments of about 120 days of forbearance they are more financially strapped and we are concerned buying djs are not going to go to 180 days in the market and that will present a significant problem. In the statement weve addressed private servicers need to adhere to these guidelines. I would also like to add a wealth of their efforts have you seen industry stakeholders make to protect the homeowner is . Theyve done a great deal to set up clear information for the borrowers and understand what their options are. Theyve made an effort to shift other servicing obligations to individual homes. I think this has been turned tht efforts the servicers have made and proactively reaching out to the customers to find out what their situation is and make sure they are getting. I believe in administration has continuously ruled out updated guidance. In the few seconds left, as time permits later we will hear your assessment of the agencys assisted withaveassisted with td implementation of the act and i will yield back. The time has expired. The chair will recognize next days velazquez of the Business Committee for questions. Thank you chairman green and the Ranking Member for this important hearing. This question is for the panel. Companies like this under a center offered her the terms of the Administration Plan to weaken the disparate impact hole thereby making it harder to pursue discrimination cases. There are other groups that proposed changes as well so with a quick yes or no, does anyone believe now it is time to weaken the housing discrimination rules . No. Mr. Demarco . We dont want to weaken housing discrimination. Theyve provided some guidance to the services regarding the carers at related to the forbearance in recent past all of the reports found and i quote, fha service or website representing about 90 of the loans provided clear guidance. Do you think further guidance is needed . They should provide further guidance so should the congresst in the next package. Those oboth of websites, writtee and oral notice. And why do you think they havent issued a subject guide t is . I cant answer why they have not done that but i do agree that theyve done a really incredible job and they put out a lot of new rules that hopefully will make it more affordable for people. Fourpart acn about having to pay a lump sum payment at the end of them forbearance periodo you feel misinformation about the y repayment options . Absolutely. The people that we talked to her gracile adult hour a lump sum payment. Of them have even heard of the 180 days let alone so its causing a lot of undue headache in these communities and they are concerned about their abilitynt to pay let alone after 90 days. They are concerned when they are going to work into the question earlier, yes when the employment increases, things will be a little bit better to dovetail on the plus side, we need more awareness. The borrowers need to know what to promote on tv and radio. They need to know they are protected in this folklore right now. Whose responsibilities are to get information out of . The servicers and the government right now those correctly might still be unable to make their payments when the forbearance protection expires. Are you concerned about their ability to work with borrowers to people that i knoww that said thats what they told us. Anotherth service or gave 90 das and then headed payment of 17,000. The gentle ladys time has expired. The chair will now recognize for five minutes for questions. Thank you mr. Chairman. Its good to be with you all. A benefit on conference video. I appreciate the hearing. We need to get this right. We are experiencing some of the lowest unemployment in history. South carolina and history ofem the country is changed everything so the federal government did what it could and they have a lot of great things and i think overwhelmingly it was in the right direction. We need to make sure we get them tthe help that they need. We are expecting january, february, march april, the sooner the better in my opinion. I think that we would all agree on that. I hope they get it right the first time. We are going to hit the six months and have a lot of people still unemployed. What should we need to address that . They get to six months and still experience an Economic Hardship because of this pandemic than they should be in touch with the service or requesting an additional expansion of their forbearance period. So in a sense the answer is already there. The larger question is getting people back to work and balancing and dealing with those Health Issues the country is facing a. The issue is if you are older or have an underlining health condition, we need you to protect yourself and make sure you were able if you are not worried about how your credit will risk your safety to go back to work but if you are healthy and have a lower risk factor we need to get back to work because ultimately getting it back is what is going to get us through fathis. I just want to supplement we do want to see people get back to work when it is time to do that and theyet are healthy. The 23rd of thbut one third of e market is and governmentbacked loans and so we want to make sure that those people can get affordable modifications if they need them after their forbearance is so we can see increase and decrease for closure. It was remarkable. I had so many businesses calling and talking about this issue. I had a call withen the bankers the next day and wanted to make sure that wasnt going to be the case anywhere. Obviously it is unacceptable. The adverse impact on any that isnt providing some of the pr hit onto a different subject. As you all know theyve adopted a temporary origination policies for the largelthat are largely l environment we find ourselves in. This has applied to underwriting but that helpful in my opinion to maintain their independent. Id like to ask each of you yes or no did you think these policies that are set to expire august 31 these policies certainly helped keep the Mortgage Market going into in one form or another some of those programs and options should be made available and made permanent. I i will go to ms. Kelly. We think that theres important programs that we need to make sure that they are only used in certain circumstances and make sure that the appraisals are still reasonably accurate. Absolutely. I think we can agree to that. Thank you for having this hearing and i look forward to working with you on this issue and i willth yield back. The gentle man yields back into the chair recognizes for five minutes for questions. Thank you mr. Chair i subscribe to with he had to say and a pretty realistic view of what wee are facing in the questions asked. I had taken not to offen defensi differ with him in his remarks in this Economic Situation that we are in as a result of the government mandated shutdown. The bottom line, we dont have it under control. This is going to continue to evolve and its going to be difficult. We dont know in how many different ways. And mr. Timmins was saying, and i believe all of us agree we have to provide some kind of a latitude to others for all of us to get through this thing. 37 states in this past week have seen increased numbers of infections and hospitalization. We are not out of this by any stretch of the imagination. The housing industry in the mortgage industry are going to continue to be riled by this for some time. I think this is going to evolve. I would ask ms. Griffin and mr. Dimarco there are provisions in the act to contemplate the fact we are not out of this virus yet and at the end of the month, the pandemic Unemployment Insurance runs out and we see a lot of fun and will have been exhausted by the individual businesses. We havent done another stimulus for stability payment. If this continues to move and it has, and i will start with you, ms. Griffin, are we going to need to implement some thing so people can pay their mortgages . Forget about forbearance. Absolutely. The reality this is the situation isnt getting better. Its getting worse. Certainly considerations to helping home owners and organizations like ours and others that can help others work with these servicers this is critical to the. The work with the Counseling Organizations that we can do to several people down and give them directions even help to provide advice working with the service or as well as how to enhance their own lives. This is what we bond. We need to think about a program i will be very effective i into this something we would really encourage. Thank you for that and they will turn quickly to mr. Demarco, but i think you hit the nail on the head. The there needs to be a little of certainty and try to get a vaccine as soon as we can to make a technological breakthrough to take away the fear. But doctor demarco, what do you think we are going to need, assuming thatt its not coming s extinguished or it isnt far off for five, six, seven months . I agree. There are businesses suffering because of how the pandemic intersects with the. I understand the focus of chairman when congress had been talking about the need for the continued fiscal support in the face of the pandemic andw economic response to it is affecting the economy and businesses and workers into so i dont have a particular prescription but to say i think chairman powell certainly identified that. I think you and yield back to the chair. Weve been talking about the individual impact and i think all of us members of congress be see that every day. Right now with me say those currently in forbearance just thinking about lets just take that for a second and say my guess is tha would be about 80 of the homes in the United States would be foreclosed on within the next year and then wenive got for closure goes to sell or liquidate those with basically relaxed the Real Estate Market are the values of the collapse across the country could have a tremendous amount of foreclosures. The experience they went through during the 80s, you watch a tremendous number and the liquidations were such things were literally people that could take Retail Properties so i just wantnt to know if you have any thoughts about how bad would it be for the Housing Market in this country on valuation side in 12 or 24 months if you have a bunch of liquidations and then collapse. Mr. Demarco, they want to speak to that . It certainly would be bad. Also one of the things or barons has accomplished is in response to the Health Crisis by allowing people to be able to stay home to a foreign tea quarantines and help combat the virus recognizing the economic support because they will not be able to pay their mortgage. Said theres also the question about the incentive where people tol they have to go back work even if that isnt coinciding with the environment. Do you want to talk about what they are tryin we are tryih what is happening here . I do. It would be horrific. When i went to school they taught me food, clothing and shelter. How do we get to bailing out the Airline Industry before we look out for the home owner . If we dont do something, we dont act and get on the same page then we will be in for a huge problem. If i could add to that without first of all the forbearance havea provided a profound help to homeowners. Hopefully we can Work Together tom stem the tide what about the macro situation . And then trying to use forbearance as a mechanism . I agree with that. We should keep in mind in this situation is who is it making theirma payments and what will that do to the economy and Property Values as well and how do we collect enough data to understand whats going on to understand this catastrophe . Working with a lot of and that commercial real estate space and there is much more to do but we are headed in the right direction. Thank you so much chairman for this critically important hearing. I know that chairman has come to my district so many of my residence have been on survivor mode 88000 people were evicted out of their home so for this to happen and that they came about and that my colleague talked about this. And the moratorium of water shut offs and utilities and mortgages are just bandaids. All that will be due in the forbearance is up so what do we do now . You know from any of your clients and your membership what i hear why are we doing something so aggressive and bold like redoing for airlines and other industries or looking at reoccurring so people can pay the debt down . Even if they come back they will not have that lump sum ready to go to pay off they could still end up losing their home talk about that. You are absolutely right we house some Serious Solutions we want you to take a look at so thats the direction we feel we could go. We have been decimated. Its a critical time its. I appreciate you bringing that up because so attorney colon you have been very thoughtful of these issues and we are still leaving homeowners behind the way we are approaching this. These would be week erring paymentsf do you think that would help with the issues we see with people losing their home because of a pandemic . Thank you for your question im not familiar with the housing legislation but the biggest problem with financially strapped people is they are financially strapped they live onon the edge so anything we can do tot do that people should also look closely at the homeowners assistancecl fund and to administer programs to hit harder in the areas that could be constructive. Also getting the word out so they are knowledgeable about the program. Even with the pp eand my colleagues it is so and cumbersome but to be honest are playing games of peoples liveses if you dont actually say the correct word in a certain way i know im new but i have to pick up the phone and Call Services why did you tell them when they dont qualify according to the legislation theysi do . They need to say it this way. Its not a game. They obviously cannot pay so stop playing games with people. They will lose their home. They just dont have the capability of doing it im tired of people pretending. We did this to them. We put them on survivor mode one emergency away from going into poverty. So its our responsibility to putpe people first. Thank you so much but we really need to talk about it but we need reoccurring payments other countries are doing that let them choose what they need for their family thank you so much its always a pleasure to work with you and i yield. The chair recognizes the gentle lady for five minutes. Thank you mr. Chairman. Thank you for calling this Important Committee meeting and chairwomanth waters you are in my prayers. I am very pleased to be here. So what lessons did we learn from the past and from 2008 . I was not in congress then i am a freshman but as a representative talked about we have 4 million Mortgage Loans and forbearance and as a have told us many are not in forbearance and missing payment payments. So to put together information through the carere is act we need to get people the protection they need to protect their credit and families. So you are concerned and then reaching out when a paymentse is missed but other things do you think need to be done in order to get protection or forbearanc forbearance . We need to have communication going out mailings and emails, this should be a commercial on Television Getting this information out. They are limited and it complements the outreach is critical what i have found from theou past they really need some guidance ande some help. Even if the servicers send out information, it needs to be and simple and without question we really need to have some advocates but they are on the edge. The outreach is critical. That they donte have that capacity for that level of servicing that we will see. And then to get onto a website you dont need much from them but if you do then its more complicated we can put the onus on the homeowner. We need Automated Systems and to make sure they are offered what they need without having to go through a lot of red tape. Thats a perfect segue what are the lessons we learned in the past i hope we desperately do not repeat in this economic collapse . Thank you for the question. First, people need affordable auction on options when they cantaf make their mortgage payments thats one of the good things that came out. We dont know if the programs we have now are affordable. When you have a crisis that has been exacerbated you need to look at what the problems and the solutions are and ask yourselves t if we need to start something new. You talked earlier in your testimony and that they need to help people avoid foreclosure what is that responsibility . What could they be doing proactivelyd because there is a number of complaints going through the roof what should they doo to help people avoid foreclosure . I did in my testimony but the federal Housing Finance agency learn from consumer complaints and take action against those companies misbehaving. Second there is a rule they put out to protect people against foreclosure which they have not done. My time is expired. I will tell you i saw how big banks ine 2008. The truth is they were overpaid bank said we dont want that money we dont want it to appear as if we need the money but we imposed on them billions of dollars they were overpaid but when it comes to the consumer the consumer is shortchanged and has to jump through all kinds of hoops. So i am just appalled that the consumer always is groveling. Im not opposed to big banks that is what everybody to be treated fairly. This has no consequences if they misbehave theres no consequences it seems to me my constituents and that forbearance and then they have to hire a lawyer to pursue this. They cant get it done simply because they made a fair and just request have to go through other extenuating circumstances. I would like to know this is submitted into the record without objection i will also call to your attention and it seems people of color have to account for themselves and prove that people of color are being discriminated against this is across the board. But at some point and to expose the underbelly whats happening to people of color. In my belief that there is discrimination. Do you agree there is systemic discrimination taking place . Ia do. I agree. And then to address the black homeownership program. Do you agree there is systemic discrimination in lending . Yes there is. Yes i agree the cfpb found people with the same Credit Scores black borrowers were rejected entirely. Do you agree . I agree. I agree there is a history of this. If there is an issue yes. If you believe there is systemic discrimination with the department of reconciliation with the responsibility to deal with racism in this country and dealing with Financial Services going into policing and many other areas. If weve had this problem for hundreds of years isnt it time we do something other than what we have been doing . With that department of reconciliation. And then to report to the president secretary ofrt reconciliation. Yes we think its important. I will move on. Time is of the essence. It should be monitored and with penalties. I do believe we all have a responsibility. All persons an agreement was systematic racism and discrimination should be handled with the department that specializes in this, raise yourli hand so we may capture them on screen. My time has expired. And as statement from the Mortgage Bankers association. Now if i may bring this to closure. Thank you for your testimony in devoting your time andan resources and sharing your expertise with the subcommittee. The testimony has out to advance important work and the us congress. And in legislative days to submit written questions and to place responses in the record. I remind members to submit written questions and material for the record to the email address provided. This hearing is now adjourned and with that security ia and fiona hill from the Brookings Institute i am delighted to my colleagues and starting with what you will