In this episode of DS5: Inside the Industry, Federal Housing Finance Agency (FHFA) Director Dr. Mark A. Calabria discusses what regulators are doing to assist homeowners, lenders, and servicers, including the mortgage forbearance programs being offered to homeowners.
Calabria recently urged borrowers to “be honest,” as borrowers do not need to show any proof of financial hardship in order to skip payments for up to a year.
“We’re operating on the honor system,” Calabria said. “We are asking and we’re putting together a script for servicers. This is supposed to be limited to if you’ve lost your job, you’ve lost income. Please, if you haven’t lost your job, continue paying. If you can pay your mortgage please do so because we really need to focus on the people who can’t.”
Despite the honor system in place, borrowers will still have to provide documentation when setting up their repayment plans.
According to Calabria, up to 2 million borrowers could be applying for loan forbearance by May and said that mortgage servicers, as well as Fannie and Freddie, could handle that if it was just for a few months.