In the latest episode of DS5: Inside the Industry, Sean Ryan, CEO of Aspen Grove Solutions and Christopher Whalen, an investment banker, author, and Chairman of Whalen Global Advisors LLC, discuss the concerns forbearance, loan modifications and more raise for servicers.
In the interview, Ryan discusses how a liquidity shortfall could affect servicers in the current crisis and what needs to be done to ensure stability in the marketplace. He also outlines the reasons why servicers need to start gathering data now to prepare for the influx of loan modifications likely to follow the end of the forbearance process: No documentation can be gathered from the borrower around the forbearance request, but servicers need to collect as much data as they can now to prepare for the flood of loan modifications that will inevitably follow the end of the forbearance period:
A new white paper by Aspen—entitled “Forbearance in the CARES Act: A Review of Issues, Impact, and Mitigation Strategies“—examines the serious industry issues arising from COVID-19, including loan modifications and property inspections. The CARES Act offers streamlined forbearance processes that are very generous to homeowners and restrict some forms of servicer diligence, which is likely to make the programs far more attractive to borrowers and place added strain on servicers.
Sean advises servicers to start gearing up for an increase in inspections and preservation work as the crisis continues.
You can read a summary and watch the full interview here.