Transcripts For CSPAN2 Hearing On Mortgage Relief During The Coronavirus Pandemic 20240712

Chair, Opening Statement of the Ranking Member, Opening Statement from chairwoman waters, the witness of will be introduced, witnesses were given Opening Statement then will have two and a of witnesses and adjournment. The title of todays hearing is protecting homeowners during the pandemic oversight of mortgage servicers implementation of the cares act. Without objection that shares authorized to declare a recess of the subcommittee at any time. Also without objection members of the committee who are not members of the subcommittee may participate in todays hearing for the purposes of making an Opening Statement and asking questions of witnesses. Members are reminded to keep their video function on at all times, even when they are not recognized by the chair. Members are also reminded they are responsible for muting and and getting themselves. I think this is something thats worthy of repeating because i have made the mistake of not honoring this responsibility. I hope i dont make that mistake today. But members are also reminded that they responsible for muting and and getting themselves. And to mute themselves after they finished speaking. Consistent with the regulations accompanying h. Res. 965, staff will mute members and witnesses as appropriate only when theyve not been recognized and to avoid inadvertent background noise. Members are reminded that all house rules relating to order and decorum apply to this remote hearing. That chair now recognizes himself for four minutes for an Opening Statement. Let me start by thanking the chairwoman of the full committee. Its always an honor to serve under your leadership, madam chair. I would like to thank the Ranking Member or the participation that he has brought to this meeting. I would like to also thank the staff for the hard work that youve done and obtaining some 4000 pages of service documents. This would include policies, procedures, data on the largest services, and there are findings that include the fact that over 2 million for barretts requests have been approved by these 11 1 servicers. This was done between march 27 and june 30, 2020. Weve weve also found some other things that are causing a bit of consternation. Often servicers failed to provide the borrowers with the 180 day forbearance that has been set in the cares act, and too often borrowers were given but 90 days. I have some evidence of this failure to comply i shall share with you. This evidence is something that emanates from our request by a constituent. What are my constituents has brought to the attention of our office this document that is styled temporary hardship forbearance land agreement. I i wont go through it in its entirety but the important point rds. That this borrower faced hardship and has had payments deferred for three of the payments that are due. Three payments, and the amount due is going to be in the final analysis at the end of the deferment period, the amount due for all payments within that deferment period and any late fees that may have accrued from other sources of payment not been made timely. The point is this, it reads on this document the amount due on the next payment due date, which was three months away from the date the deferment period started, includes the amount of payments being deferred under the plan. Well, this is 90 days of deferments, not the anticipated 180 days that the cares act affords borrowers. In fact, many of the borrowers are not made aware of this, and with fine pursuant to some of the testimony that you will hear today that many of these borrowers who are accorded this 90 day period as opposed to the 180 days, they are borrowers of color. It seems that this is like many other things having a disproportionate impact on persons of color which causes me a good deal of consternation, i might add. I would also say this. This program that weve established in congress has been received by the persons who are charged with according to these forbearance agreements, the servicers, it has been received by them as an honor system. We never intended for this to be an honor system that would allow them to decide whether or not it would accord persons 180 days initially with the opportunity to extend for an additional 180 days. It was my intent that borrowers would acquire the 180 days and then they could opt to have an additional 180 days. The remedy seems to be that of having to file a lawsuit, litigation. Hire a lawyer, have to take this to court, have to have some time that might go beyond the period of time quite frankly that you anticipate having your forbearance. So im very much concerned about this, and my hope is we can get the means by which we can deal with this honor system and bring this under the auspices of a a situation such as they will have to comply as opposed to choose whether or not they will comply. With this having been said, its my honor now to recognize the Ranking Member of the subcommittee for a fiveminute Opening Statement, mr. Barr, as Ranking Member youre not recognized for your fiveminute Opening Statement. Thank you, chairman green. Good to see you and all our colleagues and witnesses. Thank you again for joining us virtually todays hearing. That coronavirus pandemic and associate government imposed shutdown of the economy disrupted the lives and livelihoods of citizens across our country. This is his shutdown, unemployment skyrocketed. Workers who remain employed face uncertain prospects for the longterm stability and families were at risk of losing their homes. As you all know Congress Passed and the president signed into law the cares act which helps individuals and Small Businesses, and created for band options for struggling homeowners. At the peak, approximately 4. 7 million families were in forbearance. Many more families would undoubtedly have lost their homes are struggled to make payments if not for the swift and decisive response from congress and the administration. The implementation of the paycheck protection program, Economic Impact payments, the Federal Reserves lending facilities under 133 which open credit markets and other assistance programs under the cares act made it easier for homeowners to pay their mortgages, families to stay in their homes and Small Businesses to build a bridge the other side of the crisis. Fortunately we have seen a number of mortgages in forbearance decrease since the peak, declining a fault 13 since may. However, we are not out of the woods yet. There are still millions of homeowners facing our chip and requiring additional assistance. I hope to learn from our Witnesses Today what may be helpful, back steps has congress contemplates additional legislation. Before reaching was a collaborative effort between congress, the administration regulators and the private sector. Its important to note while the cares act mandates servicers of federally backed mortgages offer forbearance options to borrowers, thats a requirement is not in place for loans held in portfolio or in private label security. Despite the absence of this 90, however, servicers of these nonfederally backed loans step up during this crisis and offered similar forbearance terms for the borrowers to those mandated under cares. This shows in times of crisis the government and the private sector can Work Together and the private sector has acted responsibly in the interest of homeowners without having government mandated imposed on the. Unfortunately my colleagues on the other side of the ugly topdown mandate on all services would be more effective. The partisan heroes act included a mandate for automatic forbearance for all borrowers struggling to pay their mortgages. Not only does this mandate appear unnecessary given the Market Dynamics weve seen to date but it has the potential to further disadvantage borrowers by limiting their options. On may 4 chairwoman waters and chairman green sent letters to some of the largest mortgage servicers requesting information about their interaction with customers following the passage of the cares act. The implication of the letter was that mortgage servicers skirted the responsibilities under the cares act or soma profited by steering the customers into forbearance when not in the best interest of the borrower. The date of the merger be received in response to the letter told a very different story and demonstrated services are working well with the borrowers in their times of greatest need. This hearing is, if this is here in search of a problem here now, that is not to say there were not some hiccups along the way if they were understandable growing pains and bumps in the road as Services Staff at call centers, updated websites and if omitted the Necessary Technology to help their customers. Given the scope and scale of the forbearance requests and the short timeframe to implement new processes, the servicers overall must be committed on the treatment of borrowers in a time of crisis. I think the creditors, the mortgage creditors and the services, they have learned from experience that the expense of foreclosure and repossessing his properties is not in anyones best interest. Keeping homeowners in the homes is in the best interest of all involved, particularly though struggling americans who need help. I look forward to further exploring how Services Work with their customers, the efficacy of the cares act provisions and keeping families and homes. What additional actions may be required in potential pace of improvement in the service or borrower relationship and again i think all of you for being here today and thank chairman graham again and chairwoman waters for holding this hearing. [inaudible] unmute. [inaudible] you are still unmute, madam chair on mute. All right. You can hear me now . Thank you. Mr. Chairman, i am so appreciative for your holding this hearing this morning. As i took my seat i heard you read something where there appeared to be a demand from a servicer, from an institution that was a demand for what would be considered a full payment for the months that had been missed. Is that true, mr. Chairman . May i make sure i have the information correct . Is that true . I guess the chairman is not hearing me . M. O. I. Unmuted . Can you hear me . Hello . We can hear you but he is muted. I am unmuted now. Can you hear me . Now i can you get. I just want to make sure that what i heard you say was someone had been demanded to pay the full amount of the missed payments that was about four months deal. Is that correct . I believe, forbearance, yes, maam and payable upon the end of the threemonth period. Thank you very much. I wanted to make sure i had information correct. Mr. Chairman, and members, this is precisely what what to avoid. As a matter fact, i have to say to mr. Barr, the experience that we had started in 2004 with the foreclosures that took place, placed on the market, with all of what called us to experience disaster in our communities because of these unprecedented foreclosures leads us to understand what we must do to avoid homeowners losing their homes. And so i understand that my time is up, but mr. Chairman, of what to thank you for the hearing as im absolutely committed to the proposition that this will not happen, that we are going to have a credible forbearance situation where homeowners will not cause them to lose their home. I yield back the balance of my time. The chairwoman yields back. At this time i i would like to introduce our witnesses and thank them for coming and being a part of this hearing. We have with us today alys cohen who is a staff attorney for the National Consumer law center. Marcia griffin, founder and president of home free usa. Donnell williams, president , National Association of Real Estate Brokers. And ed demarco, president , Housing Policy Council. Welcome again. Thank you for being with us virtually, and the witnesses will be recognized for five minutes to get each an oral presentation if you would. I chime will go off at the end of your time and ill ask members by wrapping up your oral testimony. Without objection the witnesses written statement will be made a part of the record. Once the witness finished their testimony each member will have five minutes to ask questions. With that, ms. Cohen, you are now recognize five minutes for your Opening Statement. Thank you very much, chairman green, Ranking Member barr and members of the subcommittee. Thank you for the opportunity to testify today. I testify on behalf of our the low income clients of the National Consumer law center as well as 20 of the Consumer Legal Services and civil rights organizations. The unprecedented coronavirus pandemic has brought elvis, death, unemployment and good economic insecurity to people across the country. Communities of color, particularly black and latinx people have been especially hardhit. Preexisting inequalities are exacerbated by the current crisis, and black and latinx homeownership is in peril. To mitigate some of the Congress Must continue its vigilant in protecting homeowners, improve transparency for housing relief programs, increased its efforts to regulate and reform the Mortgage Servicing industry, and relief for black and let next homeowners. The federal regulators must act as well to prevent avoidable foreclosures and promote sustainable homeownership. Congress must pursue dedicated efforts to protect and expand like an latinx homeownership, and pass additional measures, including collection of loan level barbara, Loan Performance and loss mitigation data with free public reporting. H. R. 6835 is a good start on this. Expansion of cares act protections must include a a standardized forbearance for all mortgages, automatic forbearance for borrowers who have missed to payments are more, affordable repayment options for borrower was exiting forbearance plans or seeking to resolve delinquencies that are available prior to foreclosure. Within notice and in language information for limited English Proficient borrowers. I moratorium on negative credit reporting, targeted support for the hardest hit communities, including funding for legal services, housing counseling, and cash assistance for delinquent borrowers. And measures to prevent neighborhood blight. Federal regulators must increase oversight, incher mortgage assistant meets the needs of Diverse Communities of homeowners, improve regulations, including recent cfpb rules the lead homeowners at risk, consider future reforms in the Mortgage Servicing industry, and investors. We commend the regulatory extension of the foreclosure moratoria, recent investment to expand loss mitigation options, and expansion of post forbearance options, and more is needed. Like an latin next homeowners are more likely now than white homeowners to struggle paying their mortgage, seeks this assistance and miss payments instead of receiving prayers. While all homeowners are more likely to report missing payments, rather than deferring payments with their servicer, in the sense of years household poll survey at the end of june, four times as many black homeowners reported missing payments as compared to deferring payments. Among hispanic or latino homeowners and homeowners who identified as other reported two or more races, it were two times as many homeowners reporting they had missed payments as compared to deferring. Only about 1. 4 times as many white homeowners report missing rather than deferring payments. How can we help homeowners who are not yet received assistance and what can we do to the disproportionally large group of borrowers of color facing this challenge . While we focused today on efforts to contain the fallout from the pandemic, we should not lose sight of the fact that for many distressed borrowers, Mortgage Servicing it is remains fundamentally broken. Our ability to prevent another great loss of homeownership for black and latinx families depends on our ability to have servicers feed that performing Default Servicing well is in their interest as well as the interest of financial distressed homeowners and their communities, and the economy. Our nation is facing unprecedented challenges that present us with a real chance to look at our priorities and assumptions and make material progress in how we measure success and inclusion. Thank you. Thank you for your testimony. Ms. Griffin, you are now recognize for five is for an Opening Statement. Thank you very much. My name is Marcia Griffin and im president and founder of home free usa, a nationwide hud approved housing counseling organization. I appreciate this opportunity to appear before you to provide firsthand insight surrounding the plight of homeowners in this pandemic. Allow me to emphasize the importance of housing counseling organizations which i would like to call nonprofit homeownership providers. Hud approved housing counseling organizations like home free usa our missionbased entities created to provide everyday people with the tools they need to achieve and sustain their housing and homeownership goals. We help renters become sustainable homeowners and help existing homeowners avoid mortgage stomach would seem and foreclosure. We are somewhat like marriage counselors when a homeowner has unanswered questions, needs could help come doesnt know what to do, doesnt understand the service or jargon can we bring them together with lenders and servicers to ensure everyone is on the same page with the goal of course a finding a mortgage solution that works for both parties. According to the u. S. Congress joint economic committee, the average foreclosure cost everyone 77,934. Lenders lose an average of between 1290 of the homes value in foreclosure and he spent about 50,000 in the process. If counsels counselors are able to prevent foreclosure, e value to lenders investors and the country is enormous. What have we seen in the market today . Calls come in different homeowners who were exhausted, paralyzed by fear, covid sick and i lost their job. Everyone is concerned that they will lose their home. First, in my work at all euros a and by calls of the National Housing Resource Center we believe servicers have improved since the start of the pandemic. But many still need better trained customer facing employees. Some callcenter employees read scripts that theyre not familiar with, dont have time to answer questions and are just not familiar enough with the process or procedures to assist consumers second, counselors assist homeowners who are improperly denied a forbearance. We have seen troubling, a troubling concentration of this issue with veteran loans. Were also seeing homeowners who may have recently completed a loan application they also have been denied or borrow such as missed a payment in march or february. I also have been denied. Furthermore, we help homeowners have requested a forbearance but still have questions about whether it is been approved and how to plan ahead for repayment. There is a frustratingly large number of homeowners who are unemployed but are still being told that Lump Sum Payments are due at the end of the forbearance. Other occurring issues are highlighted in my written testimony. Whether right or wrong, too many of our clients are intimately with the terms in the servicer scripts. The only this only compound the existing sense of distrust and fear of the banking industry. People of color are typically vulnerable to the sense of distrust of lenders and servicers as a result of their most recent experience in the last housing crisis. People of color rely heavily on organizations like home free usa to advocate for the period what can be done . First, services do not have the capacity to handle individualized support of vulnerable homeowners. It is essential housing counselors are supported so that we do not have to turn away a single consumer thus freeing of the services because we can now build the most challenging cases. Second, we feel cfpb, fhfa and had should be more solution focused and proactive in their monitoring of repayment issues. We feel the federal agencies should coordinate and identify Realtime Solutions and actively update policies and procedures. Third, we need a streamlined loss mitigation loan procedure like we had with him. The biggest problem we have will be homeowners to return to work but have significantly reduced incomes. There would be a need for aggressive and affordable Loan Modifications for these borrowers. How can counselors capable of helping homeowners and services through these collocated processes . Last, more outreach is needed. Consumer awareness of options and processes need to be better distributed. I very much appreciate this opportunity to illuminate our concerns about covid related Mortgage Servicing, the imports of housing counseling intervention, and to sound the alarm of the worst is yet to come. Organizations can play a huge role the lady will have to wrap up her testimony, please. Okay. You have exceeded your time. Okay, thank you. Thank you for your testimony. Mr. Wiggins estelle record as for five minutes for an Opening Statement. Mr. Williams is now recogniz recognize. Mr. Williams, you may have to unmute. I apologize. Thats quite all right. Continue, please. Chairman green, Ranking Member barr, chairwoman waters and distinguish most of the committee, thank you for the opportunity to testify today and to discuss the importance of protecting homeowners, especially during these difficult times. I also want to thank chairwoman Maxine Waters for calling this hearing. My name is Donnell Williams, i serve as the president of the National Association of Real Estate Brokers, the countries oldest and largest lack real estate trade association. Founded in 1947 our mission, democracy in housing, has guided our effort to ensure fair housing practices in neighborhoods across the country, especially in communities of color. Also the owner of destiny realty, a Brokerage Firm headquartered in morristown new jersey covid19 the disproportionate affecting black homeowners. It is will document that covid19 pandemic has that hada crushing and devastating effect on black homeowners and cause mass unemployment putting deep economic strain on many black bars of work hard to achieve the American Dream of homeownership. As of midjune 2020, roughly 24 of black homeowners reported some difficulty making their mortgage payment compared to white homeowners. There is a 13 gap between black homeowners and white homeowners receiving forbearance under section 4022 of the cares act, which allows borrowers to apply for a forbearance period about the 360 days. Conclusion, nor to address the challenging, challenges facing black homeowners as a result of the pandemic, it is imperative that Congress Take action to ensure that congressional and governmental efforts to maintain homeownership are accountable and include black homeowners. We urge congress to take the following actions. One, allocate specific funds targeted to the preservation of black Home Ownership. Number two, assistance for mortgage borrowers not covered by the cares act, private mortgage lenders must be required to offer government supported forbearance to their borrowers, comparable to the treatment of government supported Mortgage Loans. Number three, require fha and all servicers to notify borrowers in all communications, including mail, electronic communication and phone calls of the rights to apply for forbearance. Require all services to have dedicated tollfree lines staffed with representatives who are knowledgeable about their forebears procedures. Number four, create a large scale Public Awareness initiative. The federal government is allocating resources toward building Public Awareness about the Health Risks Associated with covid19. Similar efforts should be made to inform borrowers of their rights. Number five, ensure that fha borrowers and gse borrowers continue to have the same access to mortgage forbearance protections, financial relief, and assistance. In conclusion, the National Association of Real Estate Brokers whose members are known as real to us, since its inception has stood for democracy in housing and we are the guardians of the communities we serve. We will continue to advocate for the preservation and sustainability of homeownership for black americans and all americans. The realtors organization by the trusted advisor of our community and the conscious of the real estate industry, and we Want Congress to online nareb declaration of a ceaseanddesist on the decline of black homeownership. Thank you for the opportunity to testify before the committee today and i would be glad to answer any questions. Thank you. Thank you very much for your testimony, mr. Williams. Mr. Demarco, you are now recognize for five minutes for your Opening Statement. Chairman green, Ranking Member barr, chairwoman waters and members of the subcommittee, thank you for inviting me to testify on a mortgage servicers are responding to the challenges facing homeowners because of the novel coronavirus. Many homeowners are in deep economic distress resulting directly or indirectly from the pandemic. Also while anyone vulnerable to the virus, the health and economic costs have disproportionately affected communities of color and lower income households. From the outset of this emergency, Housing Policy Council members and of the Mortgage Services have been committed to keeping individual borrowers and families in their homes. My written statement covers for topics which i will briefly summarize here. First, the challenges facing homeowners today are not the result of underlining poor business practices. This pandemic is a National Health crisis and the steps taken to combat it has had Enormous Economic consequences. In response hpc memos and other mortgage servicers have shifted virtually all the operations out of call centers and Office Buildings to the own homes. They have trained their staffs remotely unmodified technology to mention the enormous inflow of borrower inquiries and set up automated online tools for borrowers to educate themselves and request Payment Relief. And begin offering homeowners forbearance options before the passage of the cares act. And it extended forbearance to homeowners that do not have federally backed mortgages. Then execute against an evolving series of program and regulatory announcements and various federal programs and agencies. By late may just too much in to the enactment of the cares act nearly 4. 8 million households on a forbearance plan. That decline 13 since. According to lack knight financial service, by late may 12. 3 of fha and the elbows were in forbearance and 7. 1 of gse loans were in forbearance. Servicers of these loans are required by the cares act to offer forbearance to a customer asks for it. Yet for nonfamily black, 9. 6 of such loans were also by late may. These include Bank Portfolios and vote and private label security. This is a clear indication that Bank Portfolio vendors and other investors have also responded without a federal directive providing borrower Payment Relief at an even greater rate than we see for gse loans. Second, i went to a College Partnerships and information sharing that has marked the last four months. Not only is industry been trying to Work Together to develop best practices, weve enjoyed in partnerships with the numerous other organization and stakeholders as well as numerous Government Agencies and regulators. These partnerships demonstrate a level of common concern for the families whose financial situations have been disrupted by this National Health emergency. I believe it is because of this communication and coordination where relief has been provided for so many so quickly. Transitioning from forbearance to a longerterm solution requires dedicated efforts in the borrowers and service to ensure the best resolution. The suit of armor begins repaying their mortgage, the sooner he or she resumes the wealth opportunity Home Ownership provides. When a a borrower is ready to resume monthly payments, borrow or contact with servicer is critical to achieve a seamless transition and to ensure their surname among all the parties regarding the repayment of the four born about the options available are depend on several factors come some unique to the loan program and some based on the borrowers own circumstances. Generally, the options include a shortterm repayment plan, repayment at the end of the loan term, or longerterm repayment by adding the Outstanding Payment into the loan balance and not applying the loan. The revisions of the cares act congress has taken the cornerstone action to assist borrowers and services. Who recognize the pandemic has negatively affected many consumers in communities and some of the beneficial stimulus provided under the cares act is coming to an end. We support additional measures by the congress to provide the school stimulus to hardhit consumers and community. Thank you for inviting me to participate today. I thank you for your testimony, mr. Demarco. I now recognize the gentlewoman from california, the chair of the full committee for five minutes for questions. Thank you very much, chairman green. I would like to thank all of our witnesses who are here today. I know of their work. I have worked with them over the years and they have been counseling and helping our homeowners, and im very, very pleased that they are all here this morning. But heres what i would like to do. I would like to find out, and i will ask of our witnesses in the time that i have whether or not the language in the heroes act is doing exactly what we need it to do. We know that we provided the right to request and receive forbearance for homeowners on their mortgage payment with the option to expand an additional six months i think there is some information shared with us about the fact that home owners [inaudible] to make sure that they get this information, and i would also like to know should the be additional language about loan modification so lets have each of our witnesses let me start with Marcia Griffin who ive known for its overuse. Thank you. Wonderful, thank you. Helping counseling organizations definitely support the heroes act. This is great progress. It also really helps to sort of rain in some of the issues we are seeing with private nonfederal loans. We are very, very appreciative of the suggestion of support, supplemental support for housing counseling. It is very, very much needed. The focus on our repayments and forbearance is, its good. We should certainly continue. We have spoken about our views on the heroes act also in our written testimony so i want to make sure get to the other witnesses. National Consumer Law Center staff attorney come ms. Cohen come to think we need Additional Information on probably the one year thank you for your question, chairwoman waters, and for being at the hearing today. Your question sounds like it is focusing primarily on this question whether people need more than one year of forbearance. Yes. Figures act is a lot of actual provisions in and we hope to see the senate take up Something Like that come look at the issues and find a way to get something done. With regard to your specific question, as you heard dr. Demarco say, not a long time ago, people need to transition from forbearance to repave it and so what we would like to see is legislation and programming to help people get into repayment. The financials situations country goes on an unexpected way we may need to reevaluate that what what we would like to see whats in the heroes act and in Senate Legislation is more affordable post forbearance repayment options that are mandatory. Very good. I think were talking about the same thing when you talk about repayment options after the foreclosure come after the forbearance period. Let me ask Donnell Williams come president , National Association of Real Estate Brokers. I appreciate your work so much. You have given us some advice and you pointed out a few things that you think we can do additionally. Also for five things you pointed out and what stands out most in your my that we should do to make sure that forbearance and loan modification process works . I think that the need to have information, services need to get information out of the borrowers rights out to the community and to the borrower. That can be done by mail or trusting this information any of the kind of way, doesnt come to the realtors organization and it does come through the mail that would be great, through email or what have you got we also need to data collection. Servicers need to supply information to us the cfpb. I just had a borrower in new jersey, another one in morris township new jersey tell me their Services Like chairman green say the only give them three months and the whole palace would be due in 90 days. Let me stop you picky think we should have some penalties for servicers who violate the law that we have in the heroes act and require lumpsum payments like that . I do believe so because they are road blocking, clogging it up so we cant have progress. I thank you for your testimony here today and thank you mr. Green. I yield back the balance of my time. The gentlelady yields back. The Ranking Member mr. Barr is recognized for five minutes for questions. Thank you, mr. Chairman, and thank you to all of our witnesses for your testimony. Obviously very powerful testimony about the vulnerability of homeowners at this time and mages offer one comment or observation about the testimony of all of our witnesses. It just speaks to the very important need for us to avoid any future shutdowns of the economy. Of course we need to practice hygiene and mask wearing and all the things to prevent the spread of the virus. But particularly for minority borrowers based on a test with that so many have operated today, it just speaks to divorce of getting people back to work so that they can provide for the families and meet those payment obligations. Let me start with a question for dr. Demarco about the nonfederally backed mortgages and i think your testimony was that for those nongovernment backed mortgages, those mortgages actually, those borrowers are actually experiencing a higher forbearance rate than federally backed mortgages. Dr. Demarco, what to tell you about the marketplace and how the marketplace is responding without the heroes act . I think its telling us a couple things. I think its telling us that what was in the cares act, the forbearance provision in the cares act, that have been implemented for federally backed mortgages is a sound approach to dealing with this kind of situation and the services that are not required under the cares act provide support also utilizing those same tools to assist the customers and nonfederally backed mortgages. I think it services recognized in the situation that payment forbearance is an appropriate response to assist the borrowers and the fact theyre doing that whether required by the cares act or not. So this is really developed as a best practice picketed and utilize by servicers of nonfederally backed mortgages, very effectively and as you noted and as i noted adequate rate than we see in the gse loans. Figures act which as you know past without any republican support contains some new parameters around options for home owners expensing difficulties but apparently the authors of heroes act believe instituting mandatory automatic forbearance for all borrowers and limiting loan Modification Options would benefit borrowers. Dr. Demarco, how would these proposed sections of years act in fact, a service is the ability to work with the customer and would actually help or hurt American Families trying to stay in their homes and in the context to answer the question could you talk for the boards of communication between sources and borrowers . Thats what i was going to start. I think that the idea come understand the intention behind wanting to create an automatic forbearance opportunity for borrowers but theres i suggest something more important here that actually comes out of the work that congress did in the doddfrank act and has been intimate since by the cfpb but was part of the development servicers, Service Practice as a result of the Great Recession that is the importance of timely communication between a service or and the customer, if the cuff is having problems paying their mortgage. We dont want to wait 60 days and say we havent had a check come in, put them on forbearance. Servicers have to become should be and want to be in contact with the customer before you get to 60 days and want to understand what is the customers situation so that they can in the time away deliver an appropriate support or opportune to get that homeowner back on the feet. So, for example, the homeowner may have missed to as as a payt for reasons having nothing to do with an economic disruption due to the pandemic but for some other reason. The service or want to get in touch with that homeowner, find that reason and get to solving that homeowners particular problem. Thats why we would suggest that the idea of making sure the servicer is staying in contact with the customer and the customer is staying in contact with the servicer is going to yield a better outcome for the very situations that we are going to see. My time is almost expired but i think its important recognize that different homeowners faced different difficulties and a onesizefitsall may not be better if we can get folks into repayment quicker, we should do that and finally, no matter what we did in the cares act or how much forbearance requirements or forbearance is allowed in these cases nothing can replace giving people back to work in getting kids back in school so people can take care of their mortgage obligations. Thanks so much and i yield back. The time of the gentleman has expired that the chair now recognizes the chairwoman, chairwoman beatty, the subcommittee on diversity and inclusion. You are recognized for five minutes of question. Thank you so much. Can you hear me . I can. Thank you for it is my honor to be on this committee and thank you and certainly our chairwoman of the Financial Services committee, congresswoman waters who is our and to our ranking of it. First let me say for the witnesses, thank you for your time and for your testimony. My first question im going to try to get through some questions so i cant put my head up or move on, please excuse the premises because of the time. Act is very explicit about the protections congress intended for homeowners with regards to forbearance. Borrowers expensive Financial Hardship due to covid 19 were to be provide forbearance for 180 days with the possibility of an extension for another 180 days. Despite this, ive gotten calls, dozens of calls and they are confused about what the law said and what my constituents mortgage servicers were offering in that way. As you know we passed the cares on march 27. Can you tell me, despite the confusion going on in the marketplace that we all knew about and where was the cfpb who has oversight of the Mortgage Services industry . Why did it take us into june 4 . Thank you for your question. In terms of the complaints you are hearing, we do have some good protections in the cares act and the federal regulators really need to step up their game into much greater oversight of the servicers. In terms of the cfpb, they appear to spent most of the time relaxing regulations for servicers and providing advice for homeowners. Do you think they shouldve been doing more . I get the relaxing part but people are still hurting and they have oversight. Yes or no . Yes, cfpb should do more started with making sure people dont face foreclosure until they get help. Thank you. Let me move on to the next question. Mr. Demarco, this question is for you. Earlier in the week and maybe youve seen this article, propublica published a story entitled prompt financial regulator quietly shells discrimination probes into bank of america and other lenders. Which found that the office of comptroller of the currency halted or stalled at least six investigation into discriminatory mortgage redlining against the recommendation of the own career staff. This was the same time in the same agency that was working to undermine and water down the cra act, which is supposed to protect against that type of discriminatory lending. In this article, occ found powders of discriminatory lending against africanamericans and latinos in several lending institutions in several areas around the country. It also listed a lot of of the things that were shelved. Mr. Demarco, many of the lending institutions identified in the article are members of those associations you lead. Can you tell me your response to this, and what are you doing to ensure that members of your organization are not perpetuating the social and economic injustices that africanamericans and other minorities continue to face . This is very troublesome to me. Certainly and i would understand that. Forgive me, i am not aware of this article. I have not read or seen it, so i added disadvantage in there. But i will take what you said and say look, i certainly, i would be concerned about those sort of issues that. Im sure if any of my Member Companies are named in the article that they are look at what is going on here. Thank you. I would have to go and take thank you so much. Let me go to the chairman. Mr. Chairman, i would like to request that the committee uses its powers and resources necessary to subpoena documents from the occ related to previous lending discrimination investigations and seek depositions of Senior Leaders of the occ, including the director himself, joseph oddy, to get to the bottom of these allocations allegations that weve been very thin, its been talked about an aside, mr. Demarco, its not the met with the article. I will ask my staff sin that and my time is up. I yield back. Your request is duly noted and it will be acted on in the due course of events. The chair now recognizes next the gentleman mr. Zeldin for questions for five minutes. Thank you, mr. Chairman. Can you hear me . I can. Okay. I thank you first to all the witnesses for you, appreciate your testimony today. Thank you to chairman green and Ranking Member barr and chairwoman waters as well. Appreciate all of you holding this report i have the honor and privilege of representing the first Congressional District of new york which covers most of suffolk county. Suffolk county is one of the most expensive places to live in the country. So a formal mortgage options are essential to my constituents. We are here today to discuss Mortgage Services who role in mortgage finance. On april 10 i spearheaded other two secretary mnuchin with other members of this committee. The letter highlighted the need to ensure adequate liquidity for Mortgage Servicing because residential Mortgage Services are typically obligated to advance payments of principal interest, taxes and insurance on to investors and municipalities and insurers, whether the borrower makes this payments or not. If a homeowner fails come fall spent on payments, its the services role to work with the borrower and find ways to get them back on track through Loan Modifications. In the cares act congress decided that a nationwide broadscale Forbearance Program was needed but it was important that steps were taken to if forbearance takeup rates continue to skyrocket. More goods and services have a vital role to play in helping borrowers but cannot shoulder the entire onus of government actions to protect american homeowners impacted by covid19. If they do not have access to needed liquidity to execute all those government actions. I am please federal agencies a focus on this and continue to work with the servicers in how best to serve homeowners. Fhfa and hud issued guidance. These stepbystep instruction of help guide service or the borrowers. Additionally the gses and ginnie mae have provided assistance to servicers dealing with the lowest in forbearance. Meanwhile the nuke attorney general on april 24 call for Mortgage Services to quote, automatically waive late fees and place homeowners in a threemonth forbearance as soon as i came is miss whether or not this action is requested by the homeowner. Dr. Demarco, my question first for you. Should borrowers be automatically enrolled in forbearance or is it better for the borrower to speak with his or her service or first regarding the best options for his or her situation . Definitely better for the borrower to speak with her service or as soon as have any issues with making a mortgage payment, explain what those issues are to the servicers, the servicer may work with the borrower to determine what is the appropriate course and the best course for that particular borrower circumstance. May i respond to that . Please. Because the subject came up twice i will do it for free. We believe people should talk to the servicer but as i stated before more borrowers are not paying their mortgages that are making forbearance arrangements with the services, according to the u. S. Census bureau. People who are already late on the mortgages that they can hit on the credit and they should face foreclosure and they should get more assistance. Thank you. Thank you. Dr. Demarco, forbearance takeup rate seems to have leveled off for now. What is your assessment of the servicer liquidity situation . I think as a result of the administrative actions that you mentioned, particularly by fhfa and hud as well as some action by the Federal Reserve and mortgagebacked security market, the liquidity situation has stabilized. The interesting thing is regular action separate guardrails around or limits around the servicers liquidity responsibility on any given loan actually enabled the private market to step in and provide additional liquidity once we had greater certainty about what the rules of the road were going to look like in terms of advances and what the duration was going to look like, the markets actually stepped in. We still believe that the fed and the treasury can and should be ready to step in as needed if the situation turns worse again and liquidity is needed. Thank you. My time is running out. I guess id like to look further out. In terms of in january or when we only when we start to come out of this, the lockdown especially in the southern states. What is the transition look like in terms of recognizing the inability, recognizing the tremendous pressure that has been put on an individual homeowners, and banks , local community banks. What does that transition look like in terms of trying to slowly, incrementally get us back to where their full opportunity for people to catch up on their mortgage payments and in some cases reengineering some of the mortgage products that are out there or reconstituting the mortgages that are on offer are inadvertently falling behind. How does it all come together and is it the mortgage servicer or is it, i mean obviously the Morning Service that has obligations to the shareholders. So im a little bit unclear on how we can reengineer this in a way that doesnt put the homeowner or the renter in some casesat severe rest. Once lets say the president paul law the emergency status and water might translate. [inaudible] across all of them they can be boiled down into broadly speaking for a borrower that comes out of forbearance has the capacity not just to continue to the morbid mortgage and a greater payment and they may determine they want to be on a shortterm repayment plan and get caught up after so a lot of borrowers , they can resume their mortgage payments but cant pay more than that. In thatcase the most of those borrowers , the payment is going to get added to the end of alone on the life of alone. In the behavior and resume the normal things but for those whose income has been permanently disrupted and they can go back to the prior payments are going to do a little modification where its a better way of getting them caught back up by reviewing the loan using Loan Modifications. That is brief. Dont anticipate any objection on the part of some of the shareholders of the, that are two payments through the, from the Mortgage Services. You dont expect any acting that we would have to take in order to make that happen area is already been in place. And im happy to have you answer. Just briefly but what we saw in the last crisis that we continue to see is that as you said mister lynch, services on private mortgages are beholden to the guidelines from the investors. So what we like to see is the state are her for mortgage servicers from investor liability so that they can provide Loan Modifications along the lines at the tses and sha and other Government Agencies canprovide that are sustainable. I would add that these issues are unprecedented. We dont yet know whether the Loan Modifications being offered will be a portable enough people. That the professor, thats what i wanted to know in case we do allow to give a break to some of these placeholders we need to collaborate on that and ithink that would be , that would be a winwin all the way around. But thank you very much. I yelled back. The gentleman yields that the chair now recognizes gentleman Mister Rhodes for five minutes for questions. German greenpharmacist for testifying before the committee today. Currently as you know approximately 4. 1 million homeowners are in forbearance plans. Some due to the uncertainty surrounding covid19. Courts have shown a large number continue to make payments even after requesting forbearance. That number has dropped sharply between march andjune though. Youre in tennessee folks are ready to get back to work and i believe we need to do so as quickly and safely as possible. Doctor dimarco, why did some people out into forbearance but continue to pay down the principal. In your opinion. Im not sure theres one explanation for that. In some cases it might have been a timing issue. They were sure when they got the request in time for that first love in other cases i believe it may be the majority the consumer wasnt sure what their Economic Situation was going to be. Maybe i had a lot of uncertainty at work or getting on forbearance quickly so they had that and once they realize that the impact their circumstances were okay. They may have ended up forbearance or others may actually have mediated and exported decided to take advantage of it. I think theres multiple reasons. Any adverse consequences to asking for forbearance but then not taking advantage of it was in mark. If one has, youre supposed to with the care zach said out in Economic Hardship resulting from this pandemic in order to ask for the forbearance so if you have forbearance and continue to make the mortgage payment theres no adverse consequences. You believe getting americans take me back to work. Im sorry. The only doctor marco americans back to work would decrease the number of borrowers we need to be in forbearance. Certainly punishment, the more people we get back to work the more you wont be able to pay their mortgage and that you are in forbearance. Fairfax requires constitutional forbearances for homeowners experiencing trouble due to the pandemic. Those provisions only cover however federal impact loans to doctor dimarco, how have the private Mortgage Services change their practices tokeep families in their homes . They are generally doing the same thing as federally backed mortgages. Offering mortgage payments forbearance to their customers who cant get them and declare their having Financial Hardships due to the pandemic as a result those loans are, those rate of those loansis greater. Interesting. Mister rose. One thing i wanted to point out is most private servicers if they have an investor that their servicing for, they are advancing payments so about 120 days of forbearance, much more financially sound and we are concerned that ninetyday forbearances are going to go to 180 days from the private market and thats going to prevent a significant problem. Thank you miss cohen and Mister Rhodes, the National Organization of Real Estate Brokers in our statement addressed one of our five solutions. Services need to adhere to sha guidelines. Iq. [inaudible] let me ask some questions and reclaim my time. Doctor dimarco what other efforts have you seen stakeholders make to protect homeowners . I think theyve done a great deal to set up on their website clear information for borrowers to understand what their options are. Theyve made a tremendous effort to shift their servicingoperations to individuals homes. They had to do that technology and security around to make that happen. I think those have been terrific efforts that servicers have made and the other is there proactively reaching out to their customers to find out what their situation is and to make sure theyre getting the right tools to help in their situation. Iq and throughout the pandemic i believe the Trump Administration has continuously rolled out updated guidance for industry stakeholders read doctor dimarco in the few seconds we have , i dont know if we have enough time but i would love to hear how your assessment of how the agency as assisted with the implementation of the care zach and with that i back. The general time has expired. The chair will recognize next mister vasquez, the chair of the full Small Business committeefor five minutes of questions. Thank you chairman green. Chair waters and the Ranking Member for these important hearings. Quite timely hearings. This question is for the panel. Recently companies and organizations like the center for responsible lending and the National Application of reinforce and have all come out in opposition to the Trump Administrations plan to weekend the disparate impact. Thereby making it harder to pursue housing discrimination cases. There are other groups in opposition to the proposed changes as well. So with a quick yes, sir no, does anyone believe now it is the time to weaken house and discrimination rules. Lets start with you. Know. Number. Mister dimarco. We dont want to weaken. Iq. While that sha has provided some guidance to fha services , regarding the presentation of the care that. Related to the forbearance, a recent hud oig report found that and i quote, fha or visitors, websites with with presenting about 90 percent of fha loans provided incomplete and consistent data us and clear guidance to borrowers. Do you think further guidance from the fha services regarding forbearance is needed. Fha should provide further guidance and so should congress included in the next package. About websites, writtennotice and oral notice. Why do you think the fha hasnt issued such guidance . I cant answer why fha has not done that. Ill say i agree with doctor dimarco that they done a really incredible job of a lot of guidance and they just got a lot of new rules which hopefully will make loss mitigation moreaffordable for more people. Iq, missed really what is your organization seen in terms of servicers communications to borrowers about having to pay a lump sum payment at the end of the forbearance period. Do you feel misinformation about retaining options is discouraging borrowers to obsess in the programs relief afforded to them under the care zach . Absolutely. Absolutely. The people that we talk to our frazzled about this lump sum payment. They are few of them have heard of the 180 days let alone ayear. So its causing really, its causing a lot of undue headaches in these communities. And the borrowers are concerned about their ability to pay even at some point. Let alone after 90 days. They are concerned when theyre going to work and to the question earlier when employment increases things will be a little bit better but right now thesehomeowners are frazzled. Despite everything with the servicer. They are not getting theright information. Thank you miss braley. Yes. Just to dovetail on what marcus said, we basically need more awareness. The borrowers need to know that their protected and can be promoted on tv, on radio and even email. They need to know their protected because its folklore right now. Whose responsibility it is to get information out . We are failing. The services and the government right now as we said on our statement. Mister greeley, many with mortgages in forbearance may still be unable to make their parent payments when the forbearance protections under the care zach expires. Based on what youve seen over the past few months are you concerned about Services Ability to work with borrowers to keep them in their homes after their forbearance period ends . I am very concerned area i have 2 witnesses, two people that i know that said that one servicer said they even wouldnt work with theprogram at all. Thats what they told us, they didnt work with that at all. Another servicer gave the person the borrower 90 days, three months and they have a payment of 17,000. At theend of it. So im concerned. Is a ladies time has expired. The chair will now recognize Mister Timmons for five minutes for questions. Thank you mister chairman, good to be with you all. I appreciate you having this hearing. We need to get this right. Just in january february we are experiencing him of the lowestunemployment in history in south carolina. And covid19 is changing everything so the federal government did what could. The care act had a lot of great things it has currently put together and overwhelmingly was in the right direction. Were going to make sure we get the next package right rid it needs to be tailored to those that need it and people that are still struggling from unemployment or with other economic challenges we need to make sure we get the help that they need. Were expecting a vaccine here december, january february march april. The sooner the better in my opinion you sure we will all agree on rid im going to be one ofthe first people to get it because im in the national guard, they get it right the first time. Her dimarco im concerned that in october november, were going to hit our six month and were going to have a lot of people that are stillunemployed. Our either half challenges making advantage, what policies should we consider to address that. For those in federally backed mortgages which is the majority of homeowners , they get the six months and they still are experiencing an Economic Hardship because of this pandemic. Then they should be in touch with their servicer requesting an initial extension of their forbearance. So in that sense, the answer is already there. The larger question is getting people back to work and balancing and dealing with both the Health Issues our country space as well as the need toget the economy going. We are dealing with that exact issue here in south carolina. The issue is if you are older or have an Underlying Health condition we need you to protect yourself and we need to make sure you areable to protect yourself. If youre not worried about how having your credit ruined for wrists or say going back to work but if youre healthy and you have a lower risk factor, we needto get to get back to work because ultimately getting the economy restarted and getting a vaccine is whats going to get us through this. Mister timmons. I wanted to supplement what mister dimarco said. We want to see people get back to work when its time to do that and their healthy. But one third of the Mortgage Market is not governmentbacked loans. So we want to make sure that those people can get affordable Loan Modifications if they need them after their forbearance is so that we can see increased employment and decreased foreclosure including an upstate where you live area. I appreciate that and honestly it was a remarkable, i had so many businesses, so many individuals called talking about this issue we are discussing. The balloon payment at the end of the forbearance, i had a call with the bankers and immediately the next day we wanted to make sure that was not going to be the case anywhere. Obviously its unacceptable and i think the adverse impacts on the perception of any entity that is not providing her parents is sufficient. The pr hit would be not worth the raw but onto a different subject. As you all know, the hsa and gse had adopted temporary origination policy that are largely remote and virtual environments we find ourselves in. This is applied to appraisals, underwriting and online notarization. This has been helpful in my opinion to help maintain the health of the market during the pandemic and id like to ask each of youyes, sir number do you think these remote policies set to expire august 31 should be permanent . Ill start with doctor dimarco. These policies have certainly hope the Mortgage Market going and in one form or another welike to see some of these, certainly things like remoteonline notarization be made permanent. Mister williams. I believe some of those programs should be made available andme made permanent. Thank you, miss griffith. Ill go to ms. Kelly. We think those are important programs that we need to make sure theyre only using itused in certain circumstances and make sure appraisals are no reasonably accurate. I think we agree to that. Mister chairman thank you for having this hearing and i look forward to working with you on these issues without back area. Magellan yields back. The chair recognizes the gentleman for five minutesfor questions. Thank you mister chair. I have to say i subscribe to much of what Mister Timmons had to say and pretty realistic view of what were facing and the questions that he asked. And i have taken some of not offense but i heard with mister r as he started off his remarks and saying its a tough Economic Situation were in as a result of a government mandated shutdown. And the bottom line is this is covid19 related and we dont have it under control read this thing will continue to evolve. Its going to be difficult and we dont know how many different ways. As Mister Timmons was saying and i think all of us believe , each of us has to devise some kind of latitude to others for all ofus to get through this thing. So 37 states this past week have seen increased numbers of infections and hospitalization. Were not out of this any stretch of the imagination and i think that the housing industry, mortgage industry are going to continue to be roiled by this for some time. I think this is going to evolve. I would ask miss griffin mister dimarco, there are provisions in the heroes that that contemplate the fact that were not out of this virus yet. And that at the end of this month, the pandemic Unemployment Insurance runs out. We see a lot of the funding for the ppp loans will have been exhausted by individual businesses. We havent got another stimulus or stability payment. If this virus continues to roll as it has now stuck with you miss griffin, are we going to need to implement some things in the heroes act for people to pay their mortgages get up forbearance for asecond, we all like them to pay their mortgage. Absolutely. You know, the reality is that the more help we can give to homeowners, the better. Theyre going absolutely needed as you justsaid. This is, the situation is not getting better. Its getting worse. Certainly consideration to helping homeowners, helping organizations like ours and others that can help these homeowners on their feet and work with the servicers. This is really, this is really critical. These guys really do not have our homeowners do not have any of them at least dont have a grasp for whats next. And so the work, and ill just briefly say what the counseling organizations that we can do, kind of settled people down, give them direction. Even to provide advice and guidance about working with the servicer as well as how to enhance their own lives. This is what, this is what we want. And we certainly need to think about a ham like program was very effective last time area i think this will be very effective Going Forward and this is something we would really really encourage. I thank you for that and ill turn you quickly mister dimarco. But its sort of i think you hit the nail on the head. When you have uncertainty and you have here, and an economy, it slows the economy down. No ifs, ands or buts. There needs to be some level of certainty and to try hopefully to get the vaccine as soon as we can or make some Technological Breakthroughs and therapeutics to take away the fear but doctor dimarco, what do you think were going to need assuming that this virus is not extinguished or even far off the vaccine for five, six, seven months. I agree. This is a big picture question about our economy, about Small Businesses and even Large Businesses that are suffering because of how the pandemic intersects with those industries and those businesses. Having great hardship among families because of the unemployment that isresulting from that. So this is a day macroeconomic challenge and thats a bit outside of my scope but i would say i understand the Federal Reserve chairman powell before congress recently talking about the need for continued distal support. In fate of how the pandemic and economic response to it is affecting our economy, our businesses and our workers so i dont have a particular prescription but to say that i think esther powell, chairman powell currently identified. And i thank you and i feel back to the chair area. My time has expired, the german recognizes gentleman Mister Taylor for questions. Thank you mister chairman and i appreciate this hearing. This is a very important topic and i think weve been talking a lot about individual impact and i think all of us as members of congress see that everyday and i know i was at a food bank in allen texas and just watching the real need in our communities is deeply affecting me. I want to take a second and come back and talk about the macro for a second. Talk about the picture. Right now, about eight percent of the homeowners in the United States are currently in her parents. And so that, just thinking about what that could mean, if there wasnt forbearance. Its kind of take that for a second and see if there wasnt forbearance, my guess is that would mean about 80 percent of the homes in the United States would be foreclosed in the next year you then when the foreclosure goes to sell those equity those it would basically collapse the real estate market. The home values would collapse across the country because you have a tremendous amount of Work Closures and im saying that based on the experience that dallas texas went through and dallas as a c during the 80s. I remember the savings and loan crisis and you want a tremendous number of foreclosure and trust corporations when the producing party seagate. The 80s and early 90s and the liquidations were such that things were literally, Office Buildings, training for 10 a square foot. People that could take a Retail Properties literally or paying the taxes so i just wanted to know if you have any thoughts on what we didnt have, how bad would it be for the Housing Market in this country on the valuation side. In 12 or 24 months once you had a bunch of liquidation but then collapses. Mister dimarco, did youwant to that . The congressman it would certainly be bad. I dont know how to cite it any differently than you just did. It would also, one of the things that forbearance has accomplished is it is assisted in the response to the health crisis. By allowing people to be able to stay home to quarantine or whatever the particular standard is in the community to help suppress the virus. Its helping, the virus, recognizing that its providing economic support for the household workers because theyre not going to be able to pay their mortgage so its not just economic or whatever happens in the real estate market, theres also the question of the Health Impacts we are creating when people feel they got to go back to work even if thats not coinciding with good Health Factors in this environment. Mister williams, you want to talk about what were trying to have happening here. I do. It would be for. But what happened to when i went to school they taught me the three important necessities in life werefood, clothing and shelter. How did we get to bailing out the Airline Industry before we look out for the homeowners. So i just feel that if we dont do something, if we dont , we dont get everyone involved and get on the same page. If we dont move quickly and were going to be in for ahuge , huge problem. Absolutely. If i could add to that, if i can add to that without, first of all the forbearance have provided a profound help to homeowners. Without it, we would be inundated with foreclosures. Where theres a possibility we are headed towards that and we certainly need to Work Together but with all questions for people of color or these vulnerable communities, without for variances, without the work that weredoing together , there would be a whole other generation of wealth, loss of wealth. Its bad now. It appears to get worse. And hopefully we can sort of Work Together to stem this tide. Missed do you want to make any comment i think the macro situation. There is consensus that were working a macro catastrophe by trying to useforbearance. I agree with that Mister Taylor. I think we should also keep in mind in this macro situation is who isnt making their payments and doesnt have a forbearance . What is that going to do to the economy and the Property Values as well and how can we can connect enough people that we understand whats going on sowe can prevent it faster. And in my final piece ill just point out that im working with a lot of members on the committee on both sides try to work on your parents were trying to help within the commercial real estate space because we have done a great job and we heard that on the home side. Much more work to do but were headed in the right direction. We are concerned with about two. [inaudible] the gentlemens time has expired and the gentle lady mister leefor five minutes for questions. Thank you so much chairman the and thank you for this critically important pairing. I know chairman al green has come to my district and asked and saw how even in the last session just how much committees are still suffering so many of my residence especially throughout wayne county have been on survivor mode. Theyhave been letting check by check. Just alone in the city of detroit 88,000 people were infected out of their homes. So for this to happen in pandemic and not in control of anyone. This is very much something that came about i dont think any of us could have truly been able to truly prepare for, especially in the housing mechanism. I dont know about healthcare but with housing. I want to talk about this. This is critically important and i think my colleague Mister Taylor talks, was talking about this. Forbearance in these kind of moratoriums on watershed off utility loans, mortgages, theyre just bandaids. All that money is going to be due in a forbearance is up. What are we going to do then mark i want to possibly start with Mister Williams you know from many of your clients and even in your membership, are they, because what i hear from my residence is why art are we doing payments . Why arent we doing something as aggressive and bold that we are doing for airlines and other industries. Why arent we having our people bail out where we are looking at reoccurring so that people can pay all this down. Because again, some of these jobs will come back but even if the jobs come back or not going to have that lump sum ready to go to payoff. They still might end up losing their homes. Can youtalk about that western mark. Youre absolutely right, thats why we asked for that fivepoint plan we have some serious illusions that we want youall to take a look at. So thats how, thats the direction we feel we can go in area weve been decimated. This is critical time. Its timefor action. Its really happening. I appreciate you bringing up my black neighbors the cause we lost blackmore blackhole worship in michigan than any other state, 40 percentattorney , youve been very thoughtful in how you talk about these issues and the fact that we still are leaving a lot of our neighbors across the country, homeowners behind in the way were approaching us. I dont know if youre familiar with the automatic amenities act that i introduced but it would be reoccurring payments of 2000 per month on a recharged debit card. You think that will help with some of theissues were seeing with people possibly losing their homes because of this pandemic . Thank you for your question. Im not familiar with this in my little universe has legislation and i can talk to my colleagues about it the biggest problem with angeles fat people is that they are financially strapped area so theyre living on the edge they need cash in addition to needing help from their services and from other creditors so anything we can do to do that will move things in the right direction people should also look closely around the homeowners assistance fund. Because state can also administer programs that hit the hardest hit areas in ways that beconstructive. Also congresswoman, getting the word out that the homeowner or the borrower is knowledgeable enough about the program. This could be the same, this has the same effect as the ppp where Huge Companies got all thismoney and we didnt get it. Mister williams, even with the ppp and my incredible colleague Mister Velasquez has been so much, bringing the voices of Small Businesses its so incompetent but i also be honest, services are playing games with peoples lives. Some of them if youre not saying the correct word, if youre notrequesting a certain way. Amember of congress myself , i know im new i have to pick up the phone and call a servicer and say why did you tell my resident they dont qualify when according to the legislation we passed they do qualify western mark they need to say this way. This is not a game. They obviously cant pay so letsput that as an option and stop playing games with thethat really, theyre going to lose their homes. These are not people that are like , they just dont have the capability of doing it and im tired of people pretending that its because of economic shutdown. We didthis to them. We put them on survivor mode. Literally one emergency away. Now the pandemic has happened but they were one emergency away from going into poverty. I think its our responsibility to put people first i thank all of you so much. I think we need to talk about it and we talk about this program and of course we need all those programs in the five points we need reoccurring payments. Other countries are doing getting people human dignity. Then choose for their family and payments are going to be key here. I do so much chairman green. Always a pleasure to work with you. Thank you and i yield. The gentle lady yields and the chair recognizes the gentle lady miss dean for five minutes area. Thank you misterchairman, and you hear me. Thank you mister chairman or calling this Important Committee meeting area i think chairwoman waters as well. I thank the Ranking Member mister barr, mister barr you andyour family are in my prayers. Im sorry on your grievous loss. Im pleased to be here to talk about this and know that the lens i am looking through what were talking about here in terms of folks and their mortgages in precarious places is one from what lessons did we learn from the past . What did we learn from 2008. I was not in congress that. Like representative to leave i am a freshman as representative don taylor talk about we have 4 million Mortgage Loans in forbearance. As far as the fire at the loss, many people are not in forbearance and are missing payments so we could take things cold there. And we put together information and its important protections through the karabakh and we want to do even more to the heroes at area need to get evil protections they need to keep the roof over their head to protect their credit and protect their families. Mister mcwilliams i liketo start with you. Youve begun to talk about this. But youre concerned about what Mortgage Services are and are not doing you protect borrowers in terms of whether its communication or reaching out when a payment is missed to find out whats going on to see if they should be putinto forbearance. What other things you need to be done in order to get protection, forbearance to as many borrowers as possible. I think that we need to have some communication going out in the service. They need to put in their mailings, email. This should be acommercial on television. Getting this information out. I think that we hinder ourselves. I think that their limited in giving information to services diversely as well. So those are the important things i think right off that we need to have medication to. I like to add in there also complements the outreach is critical. What we have found from the past foreclosure crisis was that people, they really need some guidance. They really need some help. And even if the servicers all send out information. It needs to be clear. It needs to be civil. And without question, we really need to have some advocates in the midst that can be able to explain things to these borrowers who as you said are our congresswoman, they are on the edge. And really just need some guidance though outreach is certainly critical and the hands need is also critical. Can i just say one other thing, i agree with Mister Williams and ms. Griffin but the servicers dont have the capacity to do the level of small servicing that were going to see. They didnt do it well in the last crisis and theyre not doing it well now. You get onto the website and you dont need much from them but if you actually need something from them its more complicated. We can put the onus on the homeowners tounderstand and reach out. We need Automated Systems and we need to make sure people are offered what they need without having to go through a lot of red tape. At the perfect segue, i wanted to ask you next. What are the lessons we learned in the past that i hope we desperately do not repeat in this economic collapse. What are some of those lessons. Thank you for the question. The first one is people need affordable options when they cant pay their regular mortgage payments. That is one of the good things that came out of the last election with a general understanding about that but we dont know whether the programs we now would be affordable. Second, when you have a crisis in black and latin homeownership thats been exacerbated by the current crisis, we need to look richly at what the problems are and what the solutions are to ask yourself whether we need to start something new. Let me ask you in my final secondtier, you talk earlier in your testimony about the cfpb and what they need to help people avoid foreclosure. What is the responsibility of the the cfpb and what could they be doing proactively as we perceive the number of complaints going through the roof, what should they be doing to help people avoid foreclosure. I have a long list in my testimony but let me give you 2. One is work with the federal Housing Finance agency on the borrower protection programs, provide transparent data, learned from consumer complaints and take action against companies that are misbehaving. Second, right now they have an interim final rule that they put out. We need to protect people against foreclosure which they havent done. The gentle lady time has expired. The chair recognizes himself in fiveminutes. I was here in 2008. And isaw how weve treated the big things. The truth is this. They were overpaid. Overpaid. Overpaid and there were banks that said we dont want that money. We dont want it to appearas though we need the money. But we imposed upon them billions of dollars. People overpaid. But when it comes to the consumer consumer gets shortchanged. The consumer has to jump through all kinds of hoops to try to get what congress intendedconsumers to receive. So im just appalled to be quite frank with you at the fact that the consumer always seems to find himself or herself scrambling to get something these big banks get as a matter of course. Im not opposed to big banks. I dont want everybody tobe treated fairly. This program in my opinion has no consequences. If the servicers misbehave are no consequences area it seems to me that we in the future will have to find a way to impose some consequences area my constituents who have actually received this notice that is according them three months of forbearance that they are entitled to 80days , they do not have to hire a lawyer if they want to do this. They can get it done simply because they have made a fair and just request. They will have to gothrough some other extenuating circumstances. I would like to know this he submitted into the record without getting. I would also called your attention this area it always seems people of color are having to account for themselves. We have to prove that people of color are being discriminated against area and this is not just as it relates to the Financial Services industry. Its across the board people of color always seem to be at the bottom. At some point we have to have a system of justice such that people of color will get the same treatment as the other persons in this society. I think that what happened to george floyd is exposing the underbelly of whats happening to people of color and other people are starting to realize that it will take more than our cries to get a son. It is my belief there is the dissemination so let me go to you, Mister Williams if i made at least her. You agree that there is this discrimination taking place in lending . I do. I agree. I see it often. What we, we have some resolutions. I mean that need to be theres no better time right now we need to address the black homeownership program. Let me do this, time is of the essence you missed griffin do you agree that there is systemic extermination in lending. Yes there is. And let me go next to miss colin. Do you agree there systemic discrimination in lending. I agree, the cfpb found for people with the same Credit Scores like borrowers were rejected from mortgages at higher rates. And mister dimarco, do you agree. I agree that we certainly have a history of this but there still seems to beareas where its an issue yes. If you agree that there is this systemic discrimination, i have proposed that we have a department of reconciliation with the responsibility of dealing with racism and insidious discrimination in this country and it would deal with Financial Services. It goes into policing and many other areas. If you agree that we have this problem and we had for hundreds of years. Its about time we do something other than what we have been doing. What you agree Mister Williams that it would be appropriate to have a department of reconciliation who has as its responsibility to look out for people being discriminated against and this would include the protected classes. The lookout for them,report to the president , secretary of reconciliation. Would you agree that such a position should exist. I agree wholeheartedly. Missed where do you stand. Yes, we take its important and we think its important to. My time is of the essence im so sorry. Where you stand please. Agree that it needs to be monitored and there is to be penalty. And mister dimarco. I have no opinion on a position like that. I do believe we all have a responsibility. Let me do this now that you sent this mister dimarco. All persons in the agreement and you think this racism and discrimination as it relates to people including the classes should be handled with the department thatspecializes in this , kindlyraise your hand. Raise your hand so that we may capture all onscreen. Okay. I see everyones hand raising, mister dimarco would you do a screenshot of this lease. Thank you. Thank you for answering, my time hasexpired. And i would like to also include for the record, a statement from the Mortgage Bankers association without objection. Without objection, included in the record. Friends, if i may now. Bring this to closure. I thank all of you for appearing today especially the witnesses. And thank you for your testimony and for devoting your time and resources to share your expertise with the subcommittee. The testimony has helped to advance the important work of the subcommittee and u. S. Congress. The chair notes that some members may have additional questions for thispanel which they may wish to submit in writing. Without objection the hearing will remain open for five legislative days for members to some questions to the business and to place their responses in the record area also without objection members will have five legislative days to submit extraneous material to the chair for inclusion in the record i remind members to submit written questions and materials for the record. The email address provided to your staff. This hearing is now and with that security ia and fiona hill from the Brookings Institute i am delighted to my colleagues