The Mortgage Bankers Association (MBA) is highlighting the challenges and successes that the COVID-19 pandemic created for mortgage servicers in response to a series of reports published this week by the U.S. Department of Housing and Urban Development (HUD)’s Office of the Inspector General (OIG).

“[The] report from the OIG confirms what we all know – the COVID-19 pandemic presented unprecedented challenges to homeowners, servicers, and the federal agencies like HUD that administer loan guarantee programs,” said Bob Broeksmit, president and CEO of the MBA. “Since the pandemic began in March 2020, mortgage servicers provided payment relief to nearly 8 million borrowers via forbearance. Today, only approximately 255,000 borrowers remain in forbearance, and delinquency rates are near historic lows.”

Broeksmit said the OIG reports help showcase the difficulties that HUD and servicers faced during the pandemic period, due in large part to the quick pace in which loss mitigation program changes had to be implemented.

“These difficulties are understandable in light of the challenges faced by both HUD and servicers in an unprecedented and rapidly changing environment,” he said. “Those difficulties increased the challenges that servicers faced in implementing these new and evolving programs for a never-before-seen volume of borrowers.”

Broeksmit acknowledged that the reports identify a series of faults in the loss mitigation programs, but the context related to the COVID-19 emergency should be considered alongside the findings, he said.

“A number of the technical faults that the report identifies were made by servicers in the spirit of helping COVID-affected borrowers exit forbearance and remain in their homes in the fastest, most efficient way possible,” he said. “Others were the unfortunate outcome of confusing or conflicting program requirements and the inherent difficulties of quickly scaling such a massive borrower assistance effort.”

Still, the successes should not be overlooked, considering the threat the COVID-19 emergency represented for borrowers.

“[M]ake no mistake, by focusing on delivering positive outcomes for homeowners, servicers’ implementation of COVID-19 relief is a major success story,” Broeksmit said.

Earlier this week, the HUD OIG published two separate reports examining the loss mitigation practices of mortgage servicers — and Mr. Cooper in particular. The reports allege that servicers did not meet HUD requirements for providing loss mitigation options to borrowers with delinquent loans insured by the Federal Housing Administration (FHA).