How to Handle Homeowners Exiting Forbearance With No Plan

Welcome to Sagent’s weekly homeowner hardship briefing where we analyze the latest market data, including the Mortgage Bankers Association’s forbearance data, to offer key takeaways for servicers. 

Here’s what’s new this week:

1. Forbearance Exit Numbers Rapidly Increasing

Forbearance exits expectedly hit the gas last week. Per the MBA’s latest forbearance data through September 13th, mortgage forbearance volume decreased by 15 basis points from 3.23% to 3.08% with volume expected to dip south of 3% in the next 10 days or so. This leaves roughly 1.5 million homeowners still in forbearance.

2. 16% of Borrowers Exiting Forbearance with No Plan in Place

As the exit rate increases, the percentage of borrowers exiting without a plan in place is also increasing. According to this week’s data, 16.3% of borrowers exiting are doing so without a loss mit plan in place. This is an ongoing problem we’ve seen throughout the pandemic, and as more borrowers look to exit forbearance, it’s a number to keep an eye on.

Also worrisome is the growing number of new forbearance requests and re-entries. As of this week, 8.24% of borrowers have re-entered. Both issues indicate that there are many borrowers who may be falling through the cracks.

3. Call Centers See Increases in Volume

I don’t typically touch on call volume in my forbearance briefings, but it’s worth noting the drastic uptick in call center volume. Total call volume has jumped from 5.8% to 7.7% in one week and average answer speed has climbed from 1 to 1.6 minutes, posing a threat to overall consumer experience.

The Bottom Line 

We knew September would be all systems go for servicers, and it’s evident in this data that things are ramping up. Your tech is essential to helping your team guide homeowners through this uphill battle to keep as many people in their homes as possible. 

As forbearance exit numbers continue to increase, the pressure (and operational challenges) for servicers will increase in kind. Sagent’s loss mitigation and consumer platforms are here to help you supercharge your borrower outreach and ensure no one slips through the cracks. 

As always, I’m on standby to answer your policy questions and talk about how to help you care for borrowers during this critical phase.