There's only so much you can automate forbearance requests: GSEs

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Borrowers aren't always willing to use digital mortgage technology on a self-serve basis but with options limited by remote work, more than half did when it came to coronavirus-related forbearance requests.

"What we're hearing from our servicers is roughly 50%-60% of all new forbearance plans were launched through self-serve digital portals," said Kevin Palmer, senior vice president of portfolio management at Freddie Mac, at a recent virtual event organized by the Mortgage Bankers Association. "We're even hearing from some servicers that it’s as high as 95%."

That has made it possible for servicers to handle an influx of requests at a challenging time, when they simultaneously had to shift to remote work, Palmer noted.

But executives from both Freddie and Fannie recommended that servicers leave other lines of communication open for borrowers, so they can talk to a live person.

Palmer suggested using a self-service portal to make a "hot transition" to a call center, in which the customer is phoned after the self-service activity is logged.

"It really speeds things up that a person at the call center is not starting cold with the borrower," he said.

Servicers are finding that some people are enrolling in forbearance plans and still making their payments because they didn't completely understand what the ramifications were when they used a self-service portal to enroll, noted Steve Pawlowski, a senior vice president at Fannie Mae. Some of the context around forbearance, such as how it affects borrowers' ability to get new loans, has been clarified over time.

"I think it's a great way to start the process," Pawlowski said of self-serve portals. "I don't necessarily think it's a great way to end the process."

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Mortgage technology Digital mortgages Servicing GSEs Fannie Mae Freddie Mac Secondary market Ginnie Mae