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Viewpoints | October 28, 2021

Providing Reassurance and Relief During the Pandemic

leanne_spies
Article By
Leanne Spies, SVP Asset Management and Operations

The COVID-19 pandemic began its grip on the nation in early 2020, affecting families, businesses and housing of all types. As the number of cases rose, lockdowns went into effect and people’s jobs were on the line. The stability of the multifamily housing finance market was at risk.

In this precarious situation, our Servicing Standard played an integral role in providing borrowers, investors and tenants with peace of mind. We delivered on our mission to maintain stability in the housing market by combining innovative solutions with expert risk management.

Reassurance for All Parties

Creating the COVID-19 forbearance plan and supplemental relief options was a concerted effort involving multiple parties. We worked with our regulator to ensure compliance with federal legislation, received buy-in from master servicers, special servicers and B-piece buyers, and at the same time, coordinated across internal teams to put new processes in place.

Communication is critical – especially in times of need and while so many people were working from home. Frequent conversations provided reassurance to our network that we were listening to all parties. And as the situation continued to evolve, we kept servicers and investors abreast of the latest developments so they could make timely and informed decisions.

Relief for Borrowers and Tenants

In 2017, we developed and first implemented our natural disaster forbearance program. COVID-19 is a different type of disaster that required thinking outside of the box. We leveraged our natural disaster forbearance framework and experiences and adjusted the program to address the special needs of our landlord borrowers and their tenants.

Along with the forbearance options, we created resources to educate borrowers and tenants about additional resources available to them to handle impacts of the pandemic. Tenants could use our property lookup tool to determine if their property was backed by a Freddie Mac mortgage, which could mean they were eligible for certain tenant protections. We also created a renter helpline, where tenants could receive financial counseling at no cost to them.

We shared information on where to find emergency rental assistance funds, so borrowers and tenants could take advantage of those funds where needed. There were many sources of relief for borrowers and tenants that we compiled on the My Home® and Multifamily COVID-19 webpages to make it easier to find.

Upholding our Servicing Standard

Overall, the COVID-19 forbearance program has been successful. Cumulatively, we have provided relief to 1,399 borrowers with securitized loans totaling $9.0 billion. As of September 2021, 1,134 of these loans ($6.9 billion by UPB) have fully repaid forborne amounts. There are a few delinquent loans in special servicing, but the vast majority of forbearance loans have either fully repaid forborne amounts or are in the process of repaying those amounts as agreed.

The emergence from forbearance of such a great proportion of those loans is a testament to the strength of this program, and how it has helped many parties navigate this difficult time.

As we slowly work toward a post-pandemic normal, there remain many unanswered questions – but we remain steady in our commitment to our borrowers and to our network. We continue to listen to our customers’ concerns and watch the market closely to react in a timely manner. Our servicing model relies on upholding our Servicing Standard, which has proved time and again that we can raise the bar on a better borrower experience, which in turn benefits their tenants.

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