CFPB reports on mortgage forbearance and defaults – Finance and Banking

United States: CFPB reports on mortgage forbearance and defaults

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In two publications, the CFPB reported on the results of analyzes of mortgage forbearance and pandemic-related defaults and consumer complaints.

In a special feature on “Characteristics of Mortgage Borrowers During the COVID-19 Pandemic,” the CFPB found that mortgage abstention and delinquency is significantly more prevalent in communities of color and low-income communities. The CFPB found that single borrower mortgages accounted for a significantly higher share of past due or overdue loans compared to those that were outstanding. In addition, the CFPB found that “the share of loans with a loan-to-value ratio greater than 60% was significantly higher for borrowers withheld (50%) or in arrears (51%) than for those who were in good standing. (34%) ”. The CFPB concluded that “as programs designed to help mortgage borrowers during the pandemic end, borrowers in forbearance or delinquent programs may be at a disproportionate risk of losing their homes.”

In a newsletter detailing mortgage complaints, the CFPB determined that consumers primarily face issues regarding (i) the accuracy and clarity of the information provided by their loan officers regarding the status of their loans or post-forbearance options and (ii) significant delays or refusals of loan modifications.

The CFPB noted that it had recently published a notice of proposed rulemaking that would amend Regulation X, 12 CFR 1024 and the existing provisions of the Mortgage Service Rule to add additional protections for borrowers related to COVID-19. The public comment period ends on May 10, 2021.

Primary sources

  1. CFPB Press Release: CFPB Releases Reports Detailing Ongoing COVID-19 Challenges for Mortgage Borrowers
  2. CFPB Report: Characteristics of Mortgage Borrowers During the COVID-19 Pandemic
  3. CFPB Report: Complaints Bulletin – Mortgage Forbearance Problems Described in Consumer Complaints

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