ABSTRACT

Loss Mitigation Toolkit Improvements for Borrowers Exiting COVID-19 Forbearance   [open pdf - 136KB]

From the Document: "Nearly a year and a half since the start of the pandemic, the US economy is on the mend. The vaccine rollout is progressing, allowing businesses to reopen and rehire workers who lost their jobs last year. Consequently, many borrowers are exiting their COVID-19 [coronavirus disease 2019] forbearance plans, which have proven to be an effective addition to the loss mitigation toolkit. Seventy to 80 percent of exiting borrowers are opting for payment deferrals (where missed payments are added to the end of the loan), and the rest are exiting forbearances with a need for loan modifications. This necessitates a closer look at the loss mitigation toolkit to maximize the number of loans that can be cured. In this brief, we identify a few improvements to the loss mitigation toolkit that have received little focus. These improvements aim (1) to maximize the number of delinquencies that can be cured by offering more sustainable payments and (2) to move forward with property disposition most efficiently when all home retention options have been exhausted."

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Date:
2021-07
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Copyright:
2021 Urban Institute. Posted here with permission. Documents are for personal use only and not for commercial profit.
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Urban Institute: https://www.urban.org/
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pdf
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application/pdf
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