Cenlar COVID-19 Preparedness Update #5
As we all navigate the impact of COVID-19, we continue to be guided by our commitment to provide you and your borrowers with the best service we can. We are well capitalized, have maintained a low risk profile and built a diverse client base. That means we can wholly focus on your needs and those of your borrowers.
From the outset of the pandemic, we have adhered to our Business Continuity/Disaster Recovery plan. Our team has acted decisively to protect our employees and the systems and processes that enable them to serve you. We are practicing social distancing with over 90% of our employees now working remotely and the balance of individuals – whose job functions are building-dependent – dispersed throughout our facilities. Across our organization, we are rapidly adapting how we work so that we may continue to uphold our commitment to you.
Understanding the Implications of the CARES Act
We are bound by federal, state and local guidance on how we should do business. Over the last several weeks, our Legal, Compliance and Operational teams have diligently monitored and analyzed the ever-changing federal, state and local guidance on relief for borrowers who have been financially impacted by COVID-19. Our leadership team is working closely with the regulators, GSEs, agencies and trade organizations to understand any changes that may be forthcoming.
With the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on Friday, March 27, we have worked around the clock to interpret the elements of the CARES Act for homeowners and the implications for you, then adapt our operations accordingly. Here are the key components of the CARES Act that pertain to mortgage loan servicing and how Cenlar is complying with this new legislation:
Forbearance under the CARES Act
During the covered period, a borrower who has suffered direct or indirect financial hardship due to COVID-19, may request a forbearance for a federally backed (FNMA, FHLMC, Ginnie, FHA, VA or USDA) mortgage loan. The borrower qualifies for forbearance regardless of their delinquency status and without documented evidence of their hardship. When the borrower identifies their financial hardship as a result of COVID-19, they are permitted to request a forbearance up to six months. They also may request an additional extension up to an additional six months.
CARES Act Borrower Education and Communication
Education and communication are fundamental to helping borrowers understand their options under the CARES Act. We are using multiple channels – call center agent scripting, borrower website, IVR and email – to connect with those who are experiencing financial hardship. To alleviate the immediate concerns of borrowers, we are providing a 90-day forbearance to those who attest to financial hardship due to COVID-19 through our website or call agents. We have developed scripting for our agents and we are building an online application (target date is mid-April) to educate the borrowers to allow them to select the forbearance period that fits their needs while apprising them of their options (which could be more or less time) under the CARES Act.
We will let borrowers know that, if they can make a payment, even a partial one, they should do so. Should the borrower express need for assistance, we will help them understand the full financial consequences of forbearance – immediate relief with the temporary suspension of payments along with an obligation to pay the total sum of the suspended payments plus the current amount due at the end of the forbearance period they requested. We are actively working to enhance our website to also share examples of these impacts. And our agents are prepared to walk borrowers through the options.
We are reaching out to those who contacted us before the CARES Act, as well as those who have made contact since, to inform them of their options.
PLEASE NOTE: If you have an asset portfolio, we will follow the CARES Act guidance for forbearance unless you have stated otherwise, however state and local guidance will still be applicable to your asset portfolio.
Over the past several weeks, we have captured borrower requests for forbearance. Beginning this past weekend and continuing over the next few days, we are sending 90-day forbearance agreements to those borrowers that have attested to COVID-19 impact.
Other CARES Act Guidance: Foreclosures and Negative Credit Bureau Reporting
A Moratorium on Foreclosures
The CARES act prohibits a servicer from initiating any judicial or non-judicial foreclosure proceeding, move for judgment or order of sale or perform a foreclosure related eviction or foreclosure sale for at least 60 days, beginning on March 18, 2020, on any federally backed mortgage loan.
This provision does not apply to vacant or abandoned properties.
Negative Credit Bureau Reporting
The CARES Act stipulates that, during an accommodation of a mortgage loan— defined broadly as an agreement to defer one or more payments, make partial payments, or suspend payments through forbearance—negative credit bureau reporting must be suppressed for the duration of that agreement.
If the loan was delinquent before the passage of the CARES Act, the creditor must maintain the delinquent status during the accommodation period, for example, a 30-day delinquency remains at 30 days. If the borrower brings the account current during the accommodation period, we are obliged to report the obligation as current.
States have enacted similar negative credit bureau reporting requirements for loans that are not covered by the CARES Act. We are implementing suppression for these loans as well.
Effective with the April 1, 2020 payment, Cenlar has stopped ACH drafting for all borrowers who have requested forbearance.
Call Center Demand
Many concerned borrowers are reaching out to our call centers on a daily basis. As a result, talk times have been longer than normal, and our call volume and wait times continue to be higher than normal as well. We ask you to help us better help borrowers by encouraging them to visit the website for service. By logging onto the website, they can complete the online forbearance request form, which is just like talking with a call center agent. We are also working diligently to enhance the website to expand the educational materials to assure that the borrower makes an appropriate selection based on their circumstances.
Additionally, we have expanded our call center hours to accommodate increased in-bound and out-bound call activity. Our Customer Interaction (CI) and Default Call Center (DCC) agents are working new weekend hours. CI is operating on Saturday from 8:30 a.m. to 5 p.m. and on Sunday from noon to 4 p.m. (EST). DCC is operating on Saturday from 8 a.m. to 5 p.m. and on Sunday from noon until 4 p.m. (EST) for out-bound calls only.
An updated dashboard, including both call center agent and web contact, will be delivered on Tuesday. The dashboard captures all borrowers that have claimed financial hardship and asked for assistance with their mortgage payments. We will continue to enhance our reporting to reflect forbearance and workout/resolution activity as loans move through this process.
Protecting your borrowers’ information, confidentiality of their data, and providing them with the fastest service possible is our goal at Cenlar.
Effective immediately, we are requiring that all electronic communications from borrowers be conducted via the secure messaging center on the website. Moving communications to the messaging center will significantly increase security of your borrowers’ personal information and data. It will expedite the handling of requests since the rep will not have to authenticate the requestor before responding, which has typically been done through a series of back and forth emails. This change will also improve the tracking of requests so that all questions are being responded to in a timely manner.
Going forward, any emails received from borrowers outside of the messaging center, will receive an autoreply with instructions on how to login to the website and use the messaging center to send their message.