In the newest episode of DS5: Inside the Industry, Sean Ryan, CEO of Aspen Grove Solutions and Christopher Whalen, an investment banker, author, and Chairman of Whalen Global Advisors LLC will be discussing the concerns of servicers as well as the future of forbearances, loan modifications, and more.
Ryan will discuss a new white paper by Aspen that explores pressing industry concerns stemming from COVID-19, including loan modifications and property inspections.
The white paper—entitled “Forbearance in the CARES Act: A Review of Issues, Impact, and Mitigation Strategies”—can be read in full here.
As the white paper explores, the CARES Act creates significant changes to current forbearance processes for government-backed loans, which amount to roughly $6.9 trillion in asset value. In addition, the streamlined forbearance processes on offer are both very generous to homeowners and restrict some established forms of servicer diligence, which could lead more borrowers to utilize the programs than normal and put added strain on servicers.
Later in the episode, we’ll be speaking with Whalen will be diving into the government’s response to the current pandemic, including servicer liquidity concerns and the long-term impact of mortgage forbearance programs. According to Black Knight, as of April 16, more than 2.9 million homeowners, or 5.5% of all mortgages, have entered into COVID-19 mortgage forbearance plans. This population represents $651 billion in unpaid principal and includes 4.9% of all GSE-backed loans and 7.6% of FHA/VA loans.
You can watch the full episode below.