Mr. Cooper released its initial numbers on how it’s serving its customers during the COVID-19 pandemic, announcing it has placed more than 86,000 customers on forbearance plans. This is approximately 2.5% of the servicer’s total customers.
The new data comes just a week after President Donald Trump signed the CARES Act, which dictates that borrowers with federally backed mortgages can receive as many as 12 months of forbearance.
In its 8-K filing with the Securities And Exchange Commission, Mr. Cooper stated that since the CARES Act was signed on March 27, forbearance volumes have ranged from approximately 8,000 to 22,000 per day. The servicer added that it’s offering forbearance plans consistent with the CARES Act and agency and FHA guidance.
“Because the full extent of the virus and the associated economic impact cannot yet be quantified, we are proactively working with government, agency, and financing partners to identify and secure robust financing alternatives and clarify forbearance and modification policies, with the goal of ensuring that our customers are served even in an extreme downside scenario,” Vice Chairman and Chief Financial Officer Chris Marshall said.
The 8-K filing included Mr. Cooper’s preliminary estimate of the composition of its servicing portfolio as of March 31, predicting its total servicing portfolio to be $629 billion. Of this amount, the servicer estimated that $108 billion of its total composition is Ginnie Mae.
Notably, Ginnie Mae did announce on March 29 that it is preparing to offer relief in the servicing liquidity crisis, offering a Pass-Through Assistance Program (PTAP) through which issuers with a P&I shortfall may request that Ginnie Mae advance the difference between available funds and the scheduled payment to investors.
Given that Mr. Cooper is one of the largest servicers, the company has been actively working with the mortgage industry’s biggest trade and lobbying groups to push federal government for widespread relief for all borrowers affected by the coronavirus outbreak in the U.S.
But there is still a lot of uncertainty when it comes to liquidity relief for servicers. In an interview with HousingWire Tuesday, Federal Housing Finance Agency Director Mark Calabria crushed growing calls from the housing industry for a federally backed liquidity facility for servicers to address the increase in forbearance due to the coronavirus. Instead of setting up a liquidity facility, Calabria said that GSEs may transfer servicing away from companies that are struggling to deal with the advances.
Mr. Cooper acknowledged in its filing the considerable uncertainty in the current environment relating to the impact of the COVID-19 pandemic, including with respect to the response of the U.S. government. As a result, it added that forecasting its liquidity and financial condition is “particularly challenging.”
“During the last downturn, Mr. Cooper Group boarded large volumes of delinquent portfolios with high levels of advances, and we worked hard to keep our borrowers in their homes,” Chairman and CEO Jay Bray said. “Since then we have built the largest nonbank platform in the industry, made significant investments in automation and efficiency, and embraced our role as the customer’s advocate. In this unprecedented environment, our leadership team is focused 100% on delivering the services American homeowners need.”