Transcripts For CSPAN Hearing On Mortgage Relief During The

CSPAN Hearing On Mortgage Relief During The Coronavirus Pandemic July 12, 2024

I would like to call the meeting to order at this time and i would like to come if i may give just a brief overview of what you can expect. There will be an Opening Statement of the chair. An Opening Statement of the Ranking Member. And Opening Statement from chairwoman waters. Introduced andbe will give their Opening Statement. And then there will be q a. The title of todays hearing is protecting homeowners during the pandemic. Oversight of Mortgage Services. Without objection, the chair is authorized to declare a recess of the subcommittee at anytime. Also members of the committee who are not members of this Sub Committee may participate in todays hearing the purposes of making an Opening Statement and asking questions of witnesses. Members are reminded to keep their video function on at all times even when they are not recognized by the chair. Embers are also reminded that they are responsible for muting and unyielding themselves. This is Something Worthy of repeating because i have made them mistake of not honoring this responsibility. Members are also reminded that they are responsible for muting and an muting themselves. And to mute themselves after they have finished speaking. Consistent with the regulations 965 staff wills only when they have not been recognized and to avoid inadvertent background noise. Numbers are reminded that all house rules related to order and a corm apply to this remote hearing. The chair now recognizes himself for four minutes for an Opening Statement. Let me start by thanking the chairwoman of the full committee. It is always an honor to serve under your leadership. I would like to thank the Ranking Member for the participation he has brought to this meeting. I would also like to thank the staff for the hard work you have done in obtaining some 4000 pages of documents. Would include policies, procedures, data on the largest tale of services. And their findings which include the fact that over 2 million forbearance request to have been approved by this by these 11 servicers. We have also found some other things that are causing some consternation. Often, servicers fail to provide bar worse with the 180 day caresance sets in the act. And too often, borrowers were given but 90 days. I have some evidence of this failure to comply 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 this document that is entitled, temporary hardship forbearance agreement. I will not go through its entirety but the important points are these. That this bar were borrow were faced a hardship and 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 parry owed, the amount due for all payments within that deferment parry owed in any late fees that may have accrued from other sources of payments not being made timely. The point is this as it reads on the document. The amount due on the next payment due date which was three months away from the date that the deferment period started includes the amount of payment being deferred under the plan. This is 90 days of deferment. Not the anticipated 180 days that the cares act. Many of the bar worse are not made aware of this and we find pursuant to some of the testimony you will here today rsat many of these borrowe who were accorded the 90 day of color. Ur borrowers it seems that this like many things is having a disproportionate impact on persons of color which causes me a great deal of consternation i would add. This program we established in congress has been received by are charged who with according these forbearance agreements, these servicers come it has been received by them as an honor system. We never intended for this to be an honor system that would allow them to decide whether or not they would accord persons the 180 days initially with the opportunity to extend for an additional 180 days. It was my intent that thee borrowers would have the 180 days. The remedy seems to be a lawsuit. A lawyer had to take this to court. Timeo have some period of that would go beyond the forbearance. I am very much concerned about this and my hope is that we can a deal by which we can do with this honor system and bring it under the auspices of a situation such as they will have to comply versus choosing whether or not they will comply. With this having been said, it is now my honor to recognize the Ranking Member of the self committee for a fiveminute Opening Statement. Coming you areer now recognized for your fiveminute Opening Statement. Thank you, chairman green. Good to see you and all of the colleagues and witnesses, thank you again for joining us virtually. The coronavirus pandemic and the associated Government Shutdown of the economy disrupted the lives and livelihoods of citizens across the country. Businesses shut down and unemployment skyrocketed. Workers faced uncertain prospects for longterm stability and families were at risk of losing their homes. As you know, Congress Passed and the president signed into law the cares act which helped individuals and Small Businesses and created forbearance options for struggling homeowners. At the peak of approximately 4. 7 million families were in forbearance. Many more families undoubtedly wouldve lost their homes if not for the swift and decisive response from congress and the administration. The implementation of the Paycheck Protection Program come Economic Impact payments, the Federal Reserve lending facilities which opened credit markets and other assistance programs under the cares act made it easier for homeowners to pay their mortgages, families to stay in their homes and Small Businesses to build a bridge to the other side of the crisis. Fortunately, we have seen the number of mortgages in forbearance decrease since the peak declining a full 13 since may however, we are not out of the woods yet. Millions ofill homeowners facing hardship requiring additional assistance. I hope to learn what may be helpful next steps as congress contemplates additional legislation. The farreaching aid was a collaborative effort between congress, the administration, regulators, and the private sector. While the cares act mandates that servicers of federally backed mortgages offer borrowerse options to that same requirement is not in place for others. Despite the absence of this mandate however, servicers of these nonfederally backed loans stepped up during this crisis and offered similar forbearance rowers. Or their bor this shows that in times of crisis the government and the private sector can act together. And that the private sector operated responsibly. Unfortunately, my colleagues on the other side of the iowa believe a topdown mandate on all servicers would be more effective. The partisan heroes act included ed mandate for automatic forbearance for all borrowers struggling to pay their mortgages. Not only does this mandate seem unnecessary but it actually has the potential to further disadvantage borrowers by limiting their options. On may 4, chairwoman waters and chairman green sent letters to some of the largest mortgage servicers requesting information 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. The data the majority received in response to that letter took told a very different story servicers areed working well with bar worse in times of their greatest need. This is a hearing in search of a problem. That is not to say that there were not some hiccups along the way. There were understandable growing pains and bumps on the road as servicers staffed up call centers and implemented websites. However, given the scope and scale of the forbearance request , thehe short timeframe servicers overall should be commended on their treatment of bar worse in a time of crisis. And i think that creditors, the mortgage creditors and servicers have learned from experience that the expense of foreclosure and repossessing these properties is not in anyones best interest. Keeping homeowners and their homes is in the best interest of thosevolved particularly struggling americans that need help. I look forward to exploring how servicers can support their customers, and what additional actions might be required by congress in potential areas of improvement and again i thank all of you for being here today and i thank chairman green again and chairwoman waters for holding this hearing. You are still on mute, madam chair. All right. You can hear me now. Thank you. Mr. Chairman . I am so appreciative for you holding this hearing this morning. As i took my seat, i heard you read something where there appears to be a demand from an was a demandhat for what would be considered months that of the must have been missed. Is that true, mr. Chairman . May i be sure to have the correct information . I guess the chairman is not hearing me. Am i a needed . I unmuted . Chairman green i am an unmuted now. I wanted to make sure that i heard to you saying that someone had been demanded to pay the full amount of the miss payment mispayment. I wanted to make sure that i had the information correct. And members, this is what we want to avoid. , thee to thank mr. Barr experience we had starting in 2004 with the foreclosures that all of whatwith caused us to experience this disaster because of these unprecedented foreclosures lead us to understand what we must do to avoid homeowners losing their homes. Upnderstand that my time is but mr. Chairman, i want to thank you for the hearing and i am absolutely committed to the proposition that this will not happen. That we are going to have a credible forbearance situation where for our homeowners which will cause them not to lose their time their home. Yields back. Oman at this time, i would like to introduce our witnesses and thank them for coming. We have with us today italys colin, the staff attorney. Griffin, founder and president of humphrey usa. President ofams, the National Associate of Real Estate Brokers. And ed dimarco. Welcome again and thank you for being with us virtually. The witnesses will be recognized for five minutes to give an oral presentation if you would. A chime will go off at the end of your time and i would ask that you respect the members and other witnesses time by wrapping up your oral testimony. Without objection, their written statement will be made a part of the record. Once they finished their testimony, each member will have five minutes to ask their questions. Your now, ms. Cohen recognized for your Opening Statement. Thank you for the opportunity to testify today. I testify on behalf of of the loan in compliance of the National Consumer law center as 20 other Legal Services and double rights organizations. The unprecedented coronavirus pandemic has brought an illness that unemployment two people across the country. Have beens of color especially hardhit. Preexisting inequalities are exacerbated by the current latin and black and homeownership is in peril. Harmtigate some of the brought by the pandemic, Congress Must continue to be vigilant to protect homeowners come improved transparency come increase its efforts to regulate and reform the Mortgage Servicing industry and center relief. The federal regulators must act prevent avoidable foreclosures and to promote sustainable homeownership. Congress must pursue dedicated efforts to protect and expand black and left neck homeownership and pass additional measures including collection of and lost mitigation data with free public reporting. Hr 6835 is a good start on this. Actnsion of cares protections must include standardized forbearance of all mortgages come automatic or parents for borrowers that if missed two payments are more come affordable repayment options for borrowers and committing forbearance plans or seeking to resolve the link with sees the link would cease. Delinquencies. E a moratorium on negative credit rating. Services,r legal counseling, and cash assistance for delinquent borrowers. And measures to prevent neighborhood flight. Moreover, federal regulators must increase oversight and ensure mortgage assistance reaches the need of diverse homeowners. And consider future reforms in the Mortgage Servicing industry. Commend the regulatory extensions of the foreclosure moratoria. And the expansion of post forbearance options and more is needed. Latinx homeowners are more likely. While all homeowners are more likely to report missing payments rather than deferring payments with their servicer, in the Census Bureau survey, four times as many black homeowners reported missing payments as reported deferring payments. Among hispanic and latino timesners, they were two as many homeowners reporting they had missed payments as compared to deferring. Only one plate four times as many white homeowners reported missing. How can we help homeowners who have not yet received assistance . And what can we do for the disproportionately large group of bar worse of color . We should not lose sight of the fact that many that for many borrowers, this industry remains broken. This depends on our ability to have servicers that perform servicing well. Our nation is facing unprecedented challenges that tosent us with a real chance look at our priorities and assumptions and make material progress in how we measure success and inclusion. Thank you. Chairman green thank you for your testimony. Ms. Griffin your now recognized for your Opening Statement. Ms. Griffin thank you very much. M president of the resident and founder of home usa. Appreciate this opportunity to appear before you to provide firsthand insight surrounding the plight of homeowners in this pandemic. Allow me to emphasize the importance of housing counseling organizations which i like to call nonprofit homeownership providers. Our mission we were created to provide everyday people with the tools they need to achieve and sustain their housing and homeownership goals. We help renters become sustainable homeowners and help existing homeowners avoid foreclosure. We are like marriage counselors. Unansweredowner has questions, needs credit help, or doesnt understand the service or jargon, we bring them together with lenders to ensure that everyone is on the same page with the goal of finding a mortgage solution that works for both parties. According to the u. S. Joint economic committee, the average foreclosure costs everyone 77,900. Lenders lose an average of 12 19 of the homes value in foreclosure and they spend about 50,000 in the process. If counselors are able to prevent foreclosure, the value to lenders, investors, and the country is an normas. What we see in the market today . Homeowners that are exhausted, paralyzed by fear and have lost their jobs. Everyone is concerned they will lose their home. At home usawork with my colleagues at the National Housing Resource Center , we do believe that servicers have improved since the start of the pandemic but many still need better trained customer facing employees. Some Call Center Employees read script they are not familiar with and dont have time to answer questions and are not familiar enough with the processor procedures to assist consumers. Of set counselors homeowners who are improperly denied a forbearance. We have seen a troubling concentration of this issue with veteran loans. We are also seeing homeowners who have made who have recently completed a home application who have also been that justborrowers missed a payment in march or february 2 have also been denied. We help homeowners who have requested a forbearance but still have questions about whether it is been approved and how to plan ahead for repayment. There is a frustratingly large number of homeowners who are unemployed but are still being are that Lump Sum Payments 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 are unfamiliar with the terms and the servicers scripts which only compounds the existing sense of mistrust and fear of the banking industry. People of color are particularly vulnerable to this lack of trust. As a result of their most experience most recent experience in the housing crisis. People of color relied heavily on organizations like home usa. Servicers do not have the capacity to handle individualized support for homeowners. It is essential that housing counselors are supported so that we do not have to turn away a single consumer. Thus freeing up services because we can handle the most challenging cases. Fpb and we feel that c hud should be more solution focused. We feel the federal agencies should coordinate and identify Realtime Solutions and actively update policies and procedures. Loss, we need extreme mitigation loans procedure like we had earlier. The biggest problem we have will be homeowners who returned to work that has significantly reduced incomes. There will be a need for aggressive and affordable Loan Modifications. Housing counselors are capable of helping homeowners and servicers through these complicating processes. Is needed. Ch Consumer Awareness of options and processes need to be better distributed. I very much appreciate this opportunity to illuminate our concerns about covid related Mortgage Servicing. The importance of intervention and a sound the alarm that the worst is yet to come. Counseling organiza

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