In the midst of the COVID 19 pandemic, we are attempting to predict what will happen in the default servicing world over the coming months. I could reference the current COVID 19 figures today but, they would be outdated before I finished posting the article.
For the default world, both counsel and servicers were required to have disaster response, business continuity and pandemic policies in place. For those like our firm, placed in the northeast of the USA, we quickly went remote for the health of our staff and the ability to continue to service our clients.
So, what can we anticipate? Delinquencies will likely jump significantly with rising unemployment. The Corelogic Loan Performance Insight Report was released yesterday. It starts with the news that delinquencies were down from 4.0 a year earlier to 3.5 of home mortgages. The lowest in more than 21 years. The among the highest serious delinquency rates include New York, New Jersey, and Connecticut. All three states are reeling in the wake of COVID-19.
First comes compliance, making sure that servicing is complying with the newly enacted CARES Act of 3/27/2020, and that servicing requirements are updated. As well as, continuing to monitor the changes as they are implemented (suspension of foreclosure activities, credit bureau reporting, forbearance and workout options).
Second, servicers must be staying up to date on the State level mandates and changes. Many firms continue to send out regular updates as Governors issue Executive Orders and Courts issue directives and Administrative Orders. As of 4/13/2020, the New York Virtual Courts are Expanded beyond Essential Matters. While the existing ban on filing new “non-essential” matters remains in effect in New York, the Judges will now begin the process of remotely scheduling and conducting conferences for pending civil (and criminal) cases. As for New Jersey, On March 27, 2020, the Supreme Court of New Jersey issued an Omnibus Order amending and extending the guidance provided in its March 17, 2020 Order. Specifically, where practicable, all hearing, conference and arguments will be conducted by video or phone conference. Furthermore, the Office of Foreclosure will not review or recommend motions or judgments received on or after March 1, 2020 pending further court order.
As with most everything, communication is key. Conference calls, virtual meetings, virtual trainings and events are the key way to keep staff informed and evolving in a very fluid scenario which seems to change almost day by day. Stay safe and for more information regarding recent changes, state level updates or to schedule a virtual meeting for your teams, please contact Deborah Gallo, Director of Operations at dgallo@friedmanvartolo.com
