What Regulators Expect From Mortgage Servicers Right Now

This post adapted from a HousingWire article by Sagent CEO Dan Sogorka. Read the full article here

I recently briefed HousingWire on the current state of the housing market and policy landscape, and given the relevance to our customers and subscribers, I wanted to give a quick rundown here on sagent.com.

We’re a year into the pandemic, and while smart policy has delayed a default wave, the threat still looms large. 

CARES policy response to pandemic lockdowns a year ago allowed 12 months of forbearances for millions. With a newly passed $1.9T stimulus bill to provide relief to struggling Americans, a stronger job market, and accelerating vaccine distribution, there’s a pinprick of light at the end of our proverbial pandemic tunnel. 

And yet, while new Biden policy extended forbearances to 18 months, we still have 2.6 million mortgages in long-term forbearance (see Figure 1).

what regulators expect from servicers
Figure 1

Yes, people are exiting forbearance, but at a slow rate. Meanwhile, 83% of borrowers have extended their forbearance (see Figure 2).

Figure 2

How many of these will default when policy relief expires? How do servicers prepare? And what do regulators expect now vs. the last crisis?

Servicers must be powered by nimble technology to be heroes to borrowers, stalwarts to investors, and stewards of consumer protection to regulators. 

It’s taken time to modernize servicing because it’s the last, most complex frontier of consumer finance. 

But our industry is ready now. This is our opportunity to show consumers and regulators that servicing is where lifetime customer care is managed and grown. And Sagent fully understands the gravity of this responsibility.

This last point is absolutely critical, as the CFPB has signaled they’ll be watching servicers extremely close as this plays out. We all know technology shortcomings in the post-2008 years led to weak servicer practices. 

Not this time. 

In this cycle, smart technology can finally power a modern consumer loss mitigation lifecycle with agency/non-agency decisioning and digital management of every detail for borrowers, investors, vendors, and regulators throughout all default phases.

To read my full breakdown for HousingWire, read the full article here: “How modernized servicing creates customers for life”


See how Sagent makes you a hero to your borrowers, a stalwart to your investors, and a steward of consumer protection to regulators!

More Blog Posts