Mortgage Professionals Face Staggering Operational Challenges



Mortgage companies in this era of widespread expiring abstinence plans are faced with what experts call “mind-boggling” operational challenges, which are compounded as various agencies, including Federal Agency for Housing Finance and Federal Housing Authority—Publish updated expiration dates, regulatory requirements, and comprehensive loss reduction cascades. Outlining the latest Mortgage monitor Research from Black Knight Data & Analytics Team, Division President Ben Graboske details the daunting task — the enormous responsibility to borrowers — that today’s lending institutions face.

“Before agencies issued clarifying guidance on allowable grace periods, about 950,000 plans expired in the last six months of the year, which is roughly half of all grace loans. This estimate assumed a total 18-month maximum allowable grace period. However, now we have detailed charts of different periods of abstinence at different agencies. Depending on the specific agency and when the landlord originally requested abstinence, the plan may have a 6-, 12-, 15-, or 18-month limit. the maximum allowable time limit, which means that plans that started seven months apart now must expire at the same time, which means that abstinence plans will expire earlier than expected.

“As a result, 65% of active plans, representing an estimated 1.2 million homeowners, now expire during the remainder of 2021, including nearly 80% of all FHA and VA loans as deferral. Nearly three quarters of a million plans will expire. only in September and October. This fall, in just two months, the country’s mortgage services will have to process approximately 18,000 plans expiring on a business day, guiding borrowers through tricky waterfalls of reducing regulatory losses. The operational challenge is staggering, even if one does not take into account the overly high proportion of FHA and VA loans. Given the heightened challenges these borrowers may face in returning to repay mortgages compared to GSE loans, effective loss mitigation measures and automated processes become even more critical. important.”

The report also contains some important information related to principal, interest, tax and insurance (PITI) payments and how they affect late loan payments.

“Delayed EITI payments increased by $ 32 billion since the beginning of the pandemic, ”the message says.

“More than $ 9 billion Homeowner Assistance Funds (HAFs) were allocated under the US Bailout Act to help borrowers with late payments. Assuming 100% of the allocated HAF dollars goes directly to helping homeowners pay off missed mortgage payments – unlikely given that the program describes other possible use cases – the allocated funds would cover roughly 30% of the pandemic-related increase in mortgage delinquencies at the national level … However, this percentage varies markedly from state to state, with the minimum allocation of HAF in some states being enough to more than cover all late mortgage payments associated with the pandemic, while the percentage of other states barely covers a tenth of the outstanding amount. “

More information can be found at Black Knight’s. June 2021 Mortgage Monitor Report, available at


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