As you well know, the entire mortgage industry is giving its full attention to making sure that we assist homeowners during this challenging time. Throughout this period, Cenlar has been beside you, squarely focused on this effort and regularly updating you about our actions to assist you and your borrowers.
We have been at the front line supporting your borrowers and implementing forbearances required by the CARES Act. In fact, the whole of our organization has been devoted to this urgent work – leveraging what we know and doing what is best for you and your borrowers. The impact to your business and ours is severe, but we’re proud of the work we’re doing.
Amid a still very fluid situation, we’ve reviewed, interpreted, and executed on ever-changing and sometimes vague federal, GSE and state requirements, responded to regulator inquiries on your behalf, and built technology and tools to maintain the safety and soundness of your portfolio while assuring compliance with regulatory requirements. All of these efforts, each requiring vigilance, expertise and leadership, were further complicated by a need to quickly move our employees to work offsite. While an exceptional change to our business, this transition has been critical to protecting our employees and the work we do for you.
With these new demands and the certainty of continued unforeseen circumstances, we have been compelled to make significant material changes in our servicing practices and procedures that we couldn’t have imagined would be a part of the standard servicing process. As a result, we need to change our fee structure to reflect these material changes and actions that Cenlar is required to provide to borrowers on your behalf.
Effective with March customer hardship requests, the April invoice will reflect a COVID-19 processing fee of $22.50/month in addition to your base monthly fee for loans that are processed in accordance with CARES Act processing requirements. This fee will be in lieu of the delinquency step-up charge that would normally be assessed based upon the level of delinquency, per your contract.
We believe a flat-rate fee that does not increase over the forbearance period would be the most cost-effective solution. In fact, in most cases it will result in a lower cost to you versus the standard step-up rate over the course of the forbearance. This new monthly fee reflects the costs that Cenlar expects to incur to support you and your borrowers during the term of the CARES Act forbearances.
The COVID-19 processing fee is for the known and defined work efforts for the management of the loans under forbearance as articulated by the CARES Act, which includes the processing of the initial customer request for mortgage assistance as well as the cost to manage the monthly process. This fee does not include any amounts for actions that will be required to process a modification, repayment plan or other options to reinstate the account at the end of the forbearance period. We will notify you separately for the cost of this work along with any additional fee changes related to subsequent GSE or regulatory directives, which in the future may involve hardship package processing, deferment process, etc. For loans that are handled in accordance with the CARES requirements, this fee will not increase as loans age during the forbearance period. Cenlar’s CARES Act processing will include the following:
- Managing the borrower’s initial request for hardship assistance – either through our call center or website – with a process that is grounded in educating them about their options, so they may choose what works best for their personal situation
- Recording and registering the borrower’s selected option into our servicing system and sending the appropriate letter/communication (i.e. forbearance plan letter, etc.) to the borrower
- Managing the forbearance-related activities on a monthly basis with the clear objective of assisting the borrower to return to a current paying status through a comprehensive series of communications designed to understand their hardship status and to provide continued education about their options for either returning to a current paid status or extending their forbearance as permitted under the CARES Act. We have already begun to reach out to the customers that have requested forbearance. We will continue to do that during the entire term of the forbearance with an increased call-out strategy beginning 30 – 45 days prior to the end of the forbearance period as required by the CFPB.
During the term of the forbearance, we will also supplement this process with a series of outbound letters and email communications (where applicable) designed to maintain close contact and communication with the borrower advising them of their options and assisting them through their forbearance period.
If you have directed Cenlar to manage loans in your portfolio that are not federal mortgages differently from the CARES Act protocols, we will advise you of the costs for that work in a separate communication.
Since the crisis began, Cenlar has been focused on addressing the needs of you and your borrowers. We have acted quickly and decisively to meet historically high borrower demand in our call centers. We have adapted to an extraordinary number of regulatory and investor changes that required immediate implementation. And we have created an arsenal of borrower resources and communications, including an online forbearance application tool that we will continue to enhance to meet your needs and theirs.
Right now, our focus is on actively managing loans through the forbearance/hardship process. Our goal is to provide your borrowers with seamless solutions once their hardship can be resolved.