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Post-2008 Standardized Practices Have Helped Manage Forbearances

Posted To: MND NewsWire

Fannie Mae said that the standardization of servicing standards that followed the 2008 housing crisis appears to have helped the industry manage the recent flood of COVID-19 forbearance plans. The company included a series of questions about forbearance management in its September Lender Sentiment Survey and has now released a special report on the responses. Servicers had to move quickly to implement the forbearance programs, which were first announced by the GSEs Fannie Mae and Freddie Mac and by FHA but were then expanded and mandated by Congress under the CARES Act. They also had to manage the loans in forbearance, continue remittances to investors, and make insurance and tax payments out of escrow accounts. As the plans had three-month terms, borrowers had to be contacted to do renewals…(read more)

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