[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] PROTECTING HOMEOWNERS DURING THE PANDEMIC: OVERSIGHT OF MORTGAGE SERVICERS' IMPLEMENTATION. OF THE CARES ACT ======================================================================= VIRTUAL HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION __________ JULY 16, 2020 __________ Printed for the use of the Committee on Financial Services Serial No. 116-104 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] __________ U.S. GOVERNMENT PUBLISHING OFFICE 43-341 PDF WASHINGTON : 2021 -------------------------------------------------------------------------------------- HOUSE COMMITTEE ON FINANCIAL SERVICES MAXINE WATERS, California, Chairwoman CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina, NYDIA M. VELAZQUEZ, New York Ranking Member BRAD SHERMAN, California ANN WAGNER, Missouri GREGORY W. MEEKS, New York FRANK D. LUCAS, Oklahoma WM. LACY CLAY, Missouri BILL POSEY, Florida DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri AL GREEN, Texas BILL HUIZENGA, Michigan EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio ED PERLMUTTER, Colorado ANDY BARR, Kentucky JIM A. HIMES, Connecticut SCOTT TIPTON, Colorado BILL FOSTER, Illinois ROGER WILLIAMS, Texas JOYCE BEATTY, Ohio FRENCH HILL, Arkansas DENNY HECK, Washington TOM EMMER, Minnesota JUAN VARGAS, California LEE M. ZELDIN, New York JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia AL LAWSON, Florida WARREN DAVIDSON, Ohio MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina RASHIDA TLAIB, Michigan DAVID KUSTOFF, Tennessee KATIE PORTER, California TREY HOLLINGSWORTH, Indiana CINDY AXNE, Iowa ANTHONY GONZALEZ, Ohio SEAN CASTEN, Illinois JOHN ROSE, Tennessee AYANNA PRESSLEY, Massachusetts BRYAN STEIL, Wisconsin BEN McADAMS, Utah LANCE GOODEN, Texas ALEXANDRIA OCASIO-CORTEZ, New York DENVER RIGGLEMAN, Virginia JENNIFER WEXTON, Virginia WILLIAM TIMMONS, South Carolina STEPHEN F. LYNCH, Massachusetts VAN TAYLOR, Texas TULSI GABBARD, Hawaii ALMA ADAMS, North Carolina MADELEINE DEAN, Pennsylvania JESUS ``CHUY'' GARCIA, Illinois SYLVIA GARCIA, Texas DEAN PHILLIPS, Minnesota Charla Ouertatani, Staff Director Subcommittee on Oversight and Investigations AL GREEN, Texas Chairman JOYCE BEATTY, Ohio ANDY BARR, Kentucky, Ranking STEPHEN F. LYNCH, Massachusetts Member NYDIA M. VELAZQUEZ, New York LEE M. ZELDIN, New York, Vice ED PERLMUTTER, Colorado Ranking Member RASHIDA TLAIB, Michigan BARRY LOUDERMILK, Georgia SEAN CASTEN, Illinois WARREN DAVIDSON, Ohio MADELEINE DEAN, Pennsylvania JOHN ROSE, Tennessee SYLVIA GARCIA, Texas WILLIAM TIMMONS, South Carolina DEAN PHILLIPS, Minnesota VAN TAYLOR, Texas C O N T E N T S ---------- Page Hearing held on: July 16, 2020................................................ 1 Appendix: July 16, 2020................................................ 33 WITNESSES Thursday, July 16, 2020 Cohen, Alys, Staff Attorney, National Consumer Law Center (NCLC). 5 DeMarco, Edward J., President, Housing Policy Council (HPC)...... 10 Griffin, Marcia, Founder and President, HomeFree-USA............. 7 Williams, Donnell, President, National Association of Real Estate Brokers (NAREB)................................................ 8 APPENDIX Prepared statements: Cohen, Alys.................................................. 34 DeMarco, Edward J............................................ 64 Griffin, Marcia.............................................. 72 Williams, Donnell............................................ 81 Additional Material Submitted for the Record Green, Hon. Al: Temporary Hardship Forbearance Plan Agreement................ 84 Written statement of the Mortgage Bankers Association........ 85 PROTECTING HOMEOWNERS DURING THE PANDEMIC: OVERSIGHT OF MORTGAGE SERVICERS' IMPLEMENTATION OF THE CARES ACT ---------- Thursday, July 16, 2020 U.S. House of Representatives, Subcommittee on Oversight and Investigations, Committee on Financial Services, Washington, D.C. The subcommittee met, pursuant to notice, at 12:02 p.m., via Webex, Hon. Al Green [chairman of the subcommittee] presiding. Members present: Representatives Green, Beatty, Lynch, Velazquez, Perlmutter, Tlaib, Casten, Dean, Garcia of Texas; Barr, Zeldin, Rose, Timmons, and Taylor. Ex officio present: Representative Waters. Chairman Green. Thank you very much everyone. I am Al Green, the Chair of the Subcommittee on Oversight and Investigations. I would like to call the hearing to order at this time, and I would like to, if I may, give just a brief overview of what you can expect. We have called the hearing to order. There will be an opening statement of the Chair; an opening statement of the ranking member; an opening statement from the Chair of the full Financial Services Committee, Chairwoman Waters; witnesses will be introduced; witnesses will give their opening statements; and then we will have Q&A of witnesses, followed by adjournment. The title of today's hearing is, ``Protecting Homeowners During the Pandemic: Oversight of Mortgage Servicers' Implementation of the CARES Act.'' Without objection, the Chair is authorized to declare a recess of the subcommittee at any time. Also, without objection, members of the full Financial Services Committee who are not members of this subcommittee may participate in today's hearing for the purposes of making an opening statement and questioning the witnesses. Members are reminded to keep their video function on at all times, even when they are not being recognized by the Chair. Members are also reminded that they are responsible for muting and unmuting themselves. I think this is something that is worthy of repeating, because I have made the mistake of not honoring this responsibility. I hope that I don't make that mistake today. Members are also reminded that they are responsible for muting and unmuting themselves, and to mute themselves after they have finished speaking. Consistent with the regulations accompanying H. Res. 965, staff will mute Members and witnesses, as appropriate, only when they are not being recognized by the Chair, to avoid inadvertent background noise. Members are reminded that all House rules relating to order and decorum apply to this remote hearing. The Chair now recognizes himself for 4 minutes for an opening statement. Let me start by thanking the Chair of the full Financial Services Committee, Chairwoman Waters. It is always an honor to serve under your leadership, Madam Chairwoman. I would also like to thank the ranking member for the participation that he has brought to this hearing, and I would like to also thank the staff for the hard work that you have done in obtaining some 4,000 pages of servicer documents, including policies, procedures, and data on the largest 11 servicers, and their findings that include the fact that over 2 million forbearance requests have been approved by these 11 servicers between March 27th and June 30th of 2020. But we have also found some other things that are causing a bit of consternation. Often, servicers fail to provide the borrowers with the 180-day forbearance that has been set in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Too often, borrowers were given but 90 days. I have some evidence of this failure to comply that I shall share with you. This evidence is something that emanates from a request by a constituent. One of my constituents has brought to the attention of our office, this document that is titled, ``Temporary Hardship Forbearance Plan Agreement.'' I won't go through it in its entirety, but the important points are these, that this borrower faced a hardship and has had payments deferred for three of the payments that are due, three payments. And the amount due is going to be in the final analysis at the end of the deferment period, the amount due for all payments within that deferment period and any late fees that may have accrued from other sources of payments not being made timely. The point is this, as it reads in this document, the amount due on the next payment due date, which was 3 months away from the date that the deferment period started, includes the amount of payments being deferred under the plan. Well, this is 90 days of deferments, not the anticipated 180 days that the CARES Act affords borrowers. In fact, many of the borrowers are not made aware of this. And we find, pursuant to some of the testimony that you will hear today, that many of these borrowers who are accorded this 90-day period, as opposed to the 180 days, are borrowers of color. It seems that this is, like many other things, having a disproportionate impact on persons of color, which causes me a good deal of consternation, I might add. I would also say that this program that we established in Congress has been received by the persons who are charged with according these first agreements, these servicers--it has been received by them as an honor system. We never intended for this to be an honor system that would allow them to decide whether or not they would accord persons the 180 days initially, with the opportunity to extend for an additional 180 days. It was my intent that borrowers would acquire the 180 days, and then they could opt to have an additional 180 days. The remedy, it seems to be, that of having to file a lawsuit, litigation, to have to go out and hire a lawyer, and to have to take this to court, to have some period of time that might go beyond the period of time, quite frankly, that you anticipate having your forbearance. So, I am very much concerned about this. And my hope is that we can get a means by which we can deal with this honor system and bring this under the auspices of a situation such that they will have to comply as opposed to choosing whether or not they will comply. With this having been said, it is my honor now to recognize the ranking member of the subcommittee, Mr. Barr, for a 5- minute opening statement. Mr. Barr. Thank you, Chairman Green. It's good to see you and all of our colleagues. And to our witnesses, thank you again for joining us virtually for today's hearing. The coronavirus pandemic and the associated government-imposed shutdown of the economy disrupted the lives and livelihoods of citizens across our country. Businesses shut down. Unemployment skyrocketed. Workers who remain employed face uncertain prospects for their long-term stability, and families are at risk of losing their homes. As you all know, Congress passed and the President signed into law the CARES Act, which helped individuals and small businesses by creating forbearance options for struggling homeowners. At the peak, approximately 4.7 million families were in forbearance. Many more families would undoubtedly have lost their homes or struggled to make payments, if not for the swift and decisive response from Congress and the Administration: the implementation of the Paycheck Protection Program (PPP); economic impact payments; the Federal Reserve Lending Facilities under 13-3, which opened credit markets; and other assistance programs under the CARES Act, which made it easier for homeowners to pay their mortgages, for families to stay in their homes, and for small businesses to build a bridge to the other side of the crisis. Fortunately, we have seen the number of mortgages in forbearance decrease since the peak, declining a full 13 percent since May. However, we are not out of the woods yet. There are still millions of homeowners facing hardship and requiring additional assistance. I hope to learn from our witnesses today what may be helpful next steps as Congress contemplates additional legislation. The far-reaching aid to American homeowners was a collaborative effort between Congress, the Administration regulators, and the private sector. It is important to note that while the CARES Act mandates that servicers of federally-backed mortgages offer a forbearance option to borrowers, that same requirement is not in place for loans held in portfolio or in private label securities. Despite the absence of this mandate, however, servicers of those non-federally-backed loans stepped up during this crisis and offered similar forbearance terms for their borrowers to those mandated under CARES. This shows that, in times of crisis, the government and the private sector can work together, and that the private sector has acted responsibly in the interest of homeowners without having government mandates imposed on them. Unfortunately, my colleagues on the other side of the aisle believe that a top-down mandate on all servicers would be more effective. The partisan Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act included a mandate for automatic forbearance for all borrowers struggling to pay their mortgages. Not only does this mandate appear unnecessary given the market dynamics we have seen to date, but it actually has the potential to further disadvantage borrowers by limiting their options. On May 4th, Chairwoman Waters and Chairman Green sent letters to some of the largest mortgage servicers requesting information about their interaction with customers following the passage of the CARES Act. The implication of the letter was that mortgage servicers skirted their responsibilities under the CARES Act or somehow profited by steering their customers into forbearances that were not in the best interest of the borrower. The data that the Majority received in response to their letter told a very different story, and demonstrated that servicers are working well with borrowers in their times of greatest need. This is a hearing in search of a problem. Now, that is not to say that there weren't some hiccups along the way. There were understandable growing pains and bumps in the road as servicers staffed up call centers, updated websites, and implemented the necessary technology to help their customers. However, given the scope and scale of the forbearance request and the short timeframe to implement new processes, the servicers overall should be commended on their treatment of borrowers in a time of crisis. And I think the creditors, the mortgage creditors and the servicers have learned from experience that the expense of foreclosure and repossessing these properties is not in anyone's best interest. Keeping homeowners in their homes is in the best interest of all involved, particularly those struggling Americans who need help. I look forward to further exploring how servicers work with their customers, the efficacy of the CARES Act provisions in keeping families in their homes, and what additional actions may be required by Congress in potential areas of improvement in the servicer-borrower relationship. And, again, I thank all of you for being here today, and I thank Chairman Green and Chairwoman Waters for holding this hearing. I yield back. Chairman Green. Mr. Barr yields back. The Chair now recognizes the Chair of the full Financial Services Committee, the gentlewoman from California, the Honorable Chairwoman Waters, for 1 minute. Chairwoman Waters. Thank you. Mr. Chairman, I am so appreciative of you for holding this hearing this morning. As I took my seat, I heard you read something where there appeared to be a demand from a servicer, from an institution that was a demand for what would be considered a full payment for the months that have been missed. I just wanted to make sure that what I heard you saying was that someone had been demanded to pay the full amount of the missed payments that was about 4 months' past due. Is that correct? Chairman Green. Three months of forbearance, yes, ma'am, and it would be payable upon the end of the 3-month period. Chairwoman Waters. Thank you very much. I wanted to make sure that I had the information correct. Mr. Chairman and members, this is precisely what we want to avoid. As a matter of fact, I have to say to Mr. Barr, the experience that we had started in 2004 with the foreclosures that took place, with the exotic products that were placed on the market, with all of what caused us to experience disaster in our communities because of these unprecedented foreclosures leads us to understand what we must do to avoid homeowners losing their homes. I understand that my time is up. But Mr. Chairman, I want to thank you for the hearing. And I am absolutely committed to the proposition that this will not happen, that we are going to have a credible forbearance situation for our homeowners that will not cause them to lose their homes. I yield back the balance of my time. Chairman Green. The chairwoman yields back. At this time, I would like to introduce our witnesses and thank them for coming and being a part of this hearing. We have with us today: Alys Cohen, a staff attorney for the National Consumer Law Center; Marcia Griffin, founder and president of HomeFree-USA; Donnell Williams, president of the National Association of Real Estate Brokers; and Ed DeMarco, president of the Housing Policy Council. Welcome, again. Thank you for being with us virtually. You will each be recognized for 5 minutes to give an oral presentation of your written testimony. A chime will go off at the end of your time, and I would ask that you respect the members' and other witnesses' time by wrapping up your oral testimony. And without objection, your written statements will be made a part of the record. Once the witnesses finish their testimony, each member will have 5 minutes to ask questions. With that, Ms. Cohen, you are now recognized for 5 minutes. STATEMENT OF ALYS COHEN, STAFF ATTORNEY, NATIONAL CONSUMER LAW CENTER (NCLC) Ms. Cohen. Thank you very much, Chairman Green, Ranking Member Barr, and members of the subcommittee. Thank you for the opportunity to testify today. I am testifying on behalf of the low-income clients of the National Consumer Law Center, as well as 20 other consumer legal services and civil rights organizations. The unprecedented coronavirus pandemic has brought illness, death, unemployment, and greater economic insecurity to people across the country. Communities of color, particularly Black and Latinx people, have been especially hard hit. Preexisting inequalities are exacerbated by the current crisis, and Black and Latinx homeownership is imperiled. To mitigate some of the harm wrought by the pandemic, Congress must continue its vigilance in protecting homeowners, improve transparency for housing relief programs, increase its efforts to regulate and reform the mortgage servicing industry, and center relief for Black and Latinx homeowners. The Federal regulators must act as well, to prevent avoidable foreclosures and promote sustainable homeownership. Congress must pursue dedicated efforts to protect and expand Black and Latinx homeownership and pass additional measures, including collection of loan level borrower, loan performance, and lost mitigation data with free public reporting. Representative Porter's bill, H.R. 6835, is a good start on this. Expansion of CARES Act protections must include standardized forbearance for all mortgages, automatic forbearance for borrowers who have missed two payments or more, affordable repayment options for borrowers exiting forbearance plans who are seeking to resolve delinquencies that are available prior to foreclosure, written notice and in-language information for limited English proficient borrowers, a moratorium on negative credit reporting, targeted support for the hardest-hit communities, including funding for legal services, housing counseling, and cash assistance for delinquent borrowers, and measures to prevent neighborhood blight. Moreover, Federal regulators must increase oversight, ensure mortgage assistance meets the needs of diverse communities of homeowners, improve regulations, including recent CFPB rules that leave homeowners at risk, and consider future reforms in the mortgage servicing industry, aligning servicer incentives with those of homeowners and investors. We commend the regulatory extension of the foreclosure moratoria, FHA's recent announcement to expand lost mitigation options, and GSE expansion of post-forbearance options, but more is needed. Black and Latinx homeowners are more likely now than White homeowners to struggle paying their mortgage, seek assistance from their servicer, and miss payments instead of receiving forbearance. While all homeowners are more likely to report missing payments rather than deferring payments with their servicer, in the Census Bureau's Household Poll Survey at the end of June, 4 times as many Black homeowners recorded missing payments as compared to deferring payments. Among Hispanic or Latinx homeowners, and homeowners who identified as other or reported two or more races, there were 2 times as many homeowners reporting that they had missed payments as compared to deferring. Only about 1.4 times as many White homeowners report missing rather than deferring payments. How can we help homeowners who have not yet received assistance? And what can we do for the disproportionately large group of borrowers of color facing this challenge? While we focus today on efforts to contain the fallout from the pandemic, we should not lose sight of the fact that for many distressed borrowers, the mortgage servicing industry remains fundamentally broken. Our ability to prevent another great loss of homeownership for Black and Latinx families depends on our ability to have servicers see that performing default servicing well is in their interest as well as the interest of financially distressed homeowners and their communities and the economy. Our nation is facing unprecedented challenges that present us with a real chance to look at our priorities and assumptions and make material progress in how we measure success and inclusion. Thank you. [The prepared statement of Ms. Cohen can be found on page 34 of the appendix.] Chairman Green. Thank you for your testimony, Ms. Cohen. Ms. Griffin, you are now recognized for 5 minutes. STATEMENT OF MARCIA GRIFFIN, FOUNDER AND PRESIDENT, HOMEFREE- USA Ms. Griffin. Thank you very much. My name is Marcia Griffin, and I am president and founder of HomeFree-USA, a nationwide HUD-approved housing counseling organization. I appreciate this opportunity to appear before you to provide firsthand insight surrounding the plight of homeowners in this pandemic. Allow me to emphasize the importance of housing counseling organizations, which I like to call nonprofit homeownership providers. Court-approved housing counseling organizations like HomeFree-USA are mission-based entities created to provide everyday people with the tools they need to achieve and sustain their housing and homeownership goals. We help renters to become sustainable homeowners and help existing homeowners avoid mortgage delinquency and foreclosure. We are somewhat like marriage counselors--when a homeowner has unanswered questions, needs credit help, doesn't know what to do, doesn't understand the servicer's jargon, we bring them together with lenders and servicers to ensure that everyone is on the same page with the goal, of course, of finding a mortgage solution that works for both parties. According to the U.S. Congress Joint Economic Committee, the average foreclosure costs everyone $77,934. Lenders lose an average of between 12 and 19 percent of the home's value at foreclosure, and they spend about $50,000 in the process. If counselors are able to prevent foreclosure, the value to lenders, investors, and the country is enormous. So, what have we seen in the market today? Calls come in daily from homeowners who are exhausted, paralyzed by fear, COVID-sick, and have lost their jobs. Everyone is concerned that they will lose their home. First, in my work at HomeFree-USA, and with my colleagues at the National Housing Resource Center, we do believe that servicers have improved since the start of the pandemic. But many still need better-trained customer-facing employees. Some call center employees read scripts that they are not familiar with, don't have time to answer questions, and are just not familiar enough with the process or procedures to assist consumers. Second, counselors assist homeowners who are probably denied a forbearance. We have seen a troubling concentration of this issue with veterans' loans. We are seeing homeowners who may have recently completed a loan application, who have been denied, or borrowers who have just missed a payment in March or February,and they have also been denied. Furthermore, we help homeowners who have requested a forbearance but still have questions about whether it has been approved and how to plan ahead for repayment. There is a frustratingly large number of homeowners who are unemployed but are still being told that lump sum payments are due at the end of the forbearance. Other occurring issues are highlighted in my written testimony. Whether right or wrong, too many of our clients are unfamiliar with the terms in the servicer scripts. This only compounds the existing sense of distrust and fear of the banking industry. People of color are particularly vulnerable to this sense of distrust of lenders and servicers as a result of their most recent experience in the last housing crisis. People of color rely heavily on organizations like HomeFree-USA to advocate for them. What can be done? First, servicers do not have the capacity to handle individualized support of vulnerable homeowners. It is essential that housing counselors are supported so that we do not have to turn away a single consumer, thus freeing up servicers because we can handle the most challenging cases. Second, we feel that the Consumer Financial Protection Bureau (CFPB), the Federal Housing Finance Agency (FHFA), and HUD should be more solution-focused and proactive in their monitoring of repayment issues. We feel the Federal agencies should coordinate and should identify real-time solutions and actively update policies and procedures. Third, we need a streamlined loss mitigation loan procedure like we had with the Home Affordable Modification Program (HAMP). The biggest problem we have will be homeowners who return to work but have significantly reduced incomes. There will be a need for aggressive and affordable loan modifications for these borrowers. Housing counselors are capable of helping homeowners and servicers through these complicated processes. Last, more outreach is needed. Consumer awareness of options and processes need to be better distributed. I very much appreciate this opportunity to illuminate our concerns about COVID-related mortgage servicing, the importance of housing counseling intervention, and to sound the alarm that the worst is yet to home. HUD-approved counseling organizations can play a huge role in-- Chairman Green. You will have to wrap up her testimony, please. You have exceeded your time. Ms. Griffin. Okay. Thank you. [The prepared statement of Ms. Griffin can be found on page 72 of the appendix.] Chairman Green. Thank you for your testimony. Mr. Williams, you are now recognized for 5 minutes. STATEMENT OF DONNELL WILLIAMS, PRESIDENT, NATIONAL ASSOCIATION OF REAL ESTATE BROKERS (NAREB) Mr. Williams. Chairman Green, Ranking Member Barr, Chairwoman Waters, and distinguished members of the subcommittee, thank you for the opportunity to testify today to discuss the importance of protecting homeowners, especially during these difficult times. I also want to thank Chairwoman Maxine Waters for calling this hearing. My time is Donnell Williams. I serve as president of the National Association of Real Estate Brokers, the country's oldest and largest Black real estate trade association. Founded in 1947, our mission, democracy in housing, has guided our efforts to ensure fair housing practices in neighborhoods across the country, especially in communities of color. I am also the owner of Destiny Realty, a brokerage firm headquartered in Morristown, New Jersey. COVID-19 is disproportionately affecting Black homeowners. It is well-documented that the COVID-19 pandemic has had a crushing and devastating effect on Black homeowners and caused mass unemployment, putting a deep economic strain on many Black borrowers who have worked hard to achieve the American Dream of homeownership. As of mid-June 2020, probably 24 percent of Black homeowners reported some difficulty making their mortgage payments, compared to White homeowners. There is a 13 percent gap between Black homeowners and White homeowners receiving forbearance under Section 4022 of the CARES Act, which allows borrowers to apply for a forbearance period of up to 360 days. Solutions: In order to address the challenges facing Black homeowners as a result of the pandemic, it is imperative that Congress take action to ensure that congressional and governmental efforts to maintain homeownership are equitable and include Black homeowners. We urge Congress to take the following actions. One, allocate specific funds targeted to the preservation of Black homeownership. Two, provide assistance for mortgage borrowers not covered by the CARES Act. Private mortgage lenders must be required to offer government-supported forbearance to their borrowers comparable to the treatment of government-supported mortgage loans. Three, require FHA and all servicers to notify borrowers in all communications, including mail, electronic communication, and phone calls, of their rights to apply for forbearance. Require all servicers to have dedicated toll-free lines, staffed with representatives who are knowledgeable about their forbearance procedures. Four, create a large-scale public affairs initiative. The Federal Government is allocating resources to building public awareness around the health risks associated with COVID-19. Similar efforts should be made to inform borrowers of their rights. Five, ensure that FHA borrowers and GSE borrowers continue to have the same access to mortgage forbearance protections, financial relief, and assistance. In conclusion, the National Association of Real Estate Brokers, whose members are known as REALTISTs, since its inception has stood with democracy in housing, and we look to the guardians of the communities we serve. We will continue to advocate for the preservation and sustainability of homeownership for Black Americans and all Americans. The REALTIST organizations are the trusted advisers of our community and the conscience of the real estate industry. And we need Congress to align with NAREB'S declaration of a cease- and-desist on the decline of Black ownership. Thank you for the opportunity to testify before the subcommittee today, and I will be glad to answer any questions. Thank you. [The prepared statement of Mr. Williams can be found on page 81 of the appendix.] Chairman Green. Thank you very much for your testimony, Mr. Williams. Mr. DeMarco, you are now recognized for 5 minutes. STATEMENT OF EDWARD J. DEMARCO, PRESIDENT, HOUSING POLICY COUNCIL (HPC) Mr. DeMarco. Chairman Green, Ranking Member Barr, Chairwoman Waters, and members of the subcommittee, thank you for inviting me to testify on how mortgage servicers are responding to the challenges facing homeowners because of the novel coronavirus. Many homeowners are in deep economic distress resulting directly or indirectly from the pandemic. Also, while anyone is vulnerable to the virus, the health and economic costs have disproportionately affected communities of color and lower- income households. From the outset of this emergency, Housing Policy Council members and other mortgage servicers have been committed to keeping individual borrowers and families in their homes. My written statement covers four topics, which I will briefly summarize here. First, the challenges facing homeowners today are not the result of poor underwriting standards or inappropriate business practices. This pandemic is a national health crisis, and the steps taken to combat it had enormous economic consequences. In response, HPC members and other mortgage servicers have shifted virtually all of their operations out of call centers and office buildings to their own homes, and trained their staffs remotely in modified technology and managed the enormous inflow of borrower inquiries. They have set up automated online tools for borrowers to educate themselves and request payment relief. They began offering homeowners forbearance options before the passage of the CARES Act. And they have extended forbearance to homeowners who do not have federally-backed mortgages. They have executed against an evolving series of programming and regulatory announcements from various Federal programs and agencies. By late May, just 2 months since enactment of the CARES Act, nearly 4.8 households were on a forbearance plan. That total has declined 13 percent since then. According to Black Knight Financial Services, by late May, 12.3 percent of FHA and VA loans were in forbearance, and 7.1 percent of GSE loans were in forbearance. Servicers of these loans are required by the CARES Act to offer forbearance to a customer who asks for it claiming a COVID-19 economic hardship. Yet, for non-federally- backed mortgages, 9.6 percent of such loans were also waived forbearance by late May. These include bank portfolio loans and loans in private label securities. This is a clear situation that bank portfolio lenders and other investors have also responded without a Federal directive, providing borrower payment relief at an even greater rate than we see for GSE loans. Second, I want to acknowledge the partnerships and information sharing that has marked the last 4 months. Not only has the industry been trying to work together to develop best practices, we have been joined in partnerships with numerous other organizations and stakeholders, as well as numerous government agencies and regulators. These partnerships demonstrate a level of common concern for the families whose financial situations have been disrupted by this national health emergency. I believe it is because of this communication and coordination that relief has been provided to so many so quickly. Transitioning from forbearance to a longer-term solution requires dedicated efforts from the borrower and servicer to ensure the best resolution. The sooner a borrower begins repaying their mortgage, the sooner he or she resumes the wealth-building opportunity that homeownership provides. When a borrower is ready to resume monthly payments, borrower contact with their servicer is critical to achieve a seamless transition and to ensure their certainty among all the parties regarding the repayment of the forborne amount. The options available are dependent on several factors, some unique to the loan program and some based on the borrower's own circumstances. Generally, the options include a short-term repayment plan, repayment at the end of the loan term, or a longer-term repayment by adding the outstanding payments into the loan balance and modifying the loan. With the forbearance provisions in the CARES Act, Congress has already taken the cornerstone action to assist borrowers and servicers. We recognize that the pandemic has negatively affected many consumers and communities and that some of the beneficial stimulus provided under the CARES Act is coming to an end. Thus, we support additional measures by the Congress to provide fiscal stimulus to hard-hit consumers and communities. Thank you for inviting me to participate today. [The prepared statement of Mr. DeMarco can be found on page 64 of the appendix.] Chairman Green. Thank you for your testimony, Mr. DeMarco. I now recognize the gentlewoman from California, the Chair of the Full Committee, Chairwoman Waters, for 5 minutes for questions. Chairwoman Waters. Thank you very much, Chairman Green. And I would like to thank all of our witnesses who are here today. I know of their worth, I have worked with them over the years, and they have been counseling and helping our homeowners, and I am very, very pleased that they are all here this morning. But here is what I would like to do. I would like to find out, and I will ask each of our witnesses, in the time that I have, whether or not the language in the HEROES Act is doing exactly what we need it to do. We know that we are provided the right to request and receive forbearance for our homeowners on their mortgage payments for up to 6 months, with the option to extend for an additional 6 months, for a total of one year. I think there was some information shared with us that homeowners don't necessarily know this. What can we do to make sure that servicers share this information? And I would also like to know, should there be additional language about loan modification for forbearance? So, let me ask each of our witnesses to share with me whether or not they think it is sufficient. Let me start with Marcia Griffin, whom I have met with for so many years. Thank you, Marcia. Ms. Griffin. Wonderful. Thank you. Housing counseling organizations definitely support the HEROES Act. This is great progress. It also really helps to sort of rein in some of the issues that we are seeing with private, non-Federal loans. We are very, very appreciative of the suggestion of support, supplemental support for housing counseling. It is very, very much needed. The focus on repayments and forbearances is good. And we should certainly continue. We have spoken about our views on the HEROES Act, also, in our written testimony. So, we are just applauding you. Chairwoman Waters. I want to make sure I get to the other two witnesses. National Consumer Law Center staff attorney, Ms. Cohen, do you think that we need additional information following the 1-year forbearance? Ms. Cohen. Thank you for your question, Chairwoman Waters, and for being at the hearing today. Your question sounds like it is focusing primarily on this question of whether people need more than one year of forbearance? Chairwoman Waters. Yes. Ms. Cohen. First of all, the HEROES Act has a lot of excellent provisions in it, and we hope to see the Senate take up something like that, look at those issues, and find a way to get something done. With regard to your specific question, as you heard Dr. DeMarco, people need to transition from forbearance to repayment. And so what we would like to see is legislation and programming to help people get into repayment. Now, of course, if the financial situation in the country goes on in an unexpected way, we may need to reevaluate that. But at this point, what we would like to see and what is in the HEROES Act and could be in Senate legislation is more affordable post- forbearance repayment options that are mandatory. Chairwoman Waters. Very good. I think we are talking about the same thing, when you talk about repayment options after the forbearance period. Let me ask Donnell Williams, president, National Association of Real Estate Brokers. I have worked with the REALTORS, just reconsolidated in L.A., and I appreciate your work so much. What do you think--you have given us some advice, and you have pointed out a few things that you think we can do additionally. Of those four or five things that you pointed out, which stands out most in your mind that we should do to make sure that this forbearance and loan modification process works? Mr. Williams. I think that the servicers need to get the information about the borrowers' rights out to the community and to the borrowers. That can be done by mail--they are not getting this information or trusting this information in any other kind of way. If it doesn't come through the REALTOR organization, and it does come through the mail, that would be great through email and what have you. We also need to have data collection. But servicers need to supply this information, this data to the CFPB and to Congress. I just had a borrower in Irvington, New Jersey, and another one in Morris Township, New Jersey, tell me their servicer, like Congressman Green said, only gave them 3 months, and that the whole balance would be due in 90 days. Chairwoman Waters. Well, let me stop you. Do you think we should have some penalties for servicers who violate the law that we have in the HEROES Act, and require lump sum payments like that? Mr. Williams. I do believe so. They are roadblocking. They are stopping. They are clogging it up so that we can't have progress. Chairwoman Waters. Well, I thank you for your testimony here today. And thank you, Mr. Green. I yield back the balance of my time. Chairman Green. The gentlelady yields back. The ranking member of the subcommittee, Mr. Barr, is recognized for 5 minutes for questions. Mr. Barr. Thank you, Mr. Chairman. And thank you to all our witnesses for your testimony, which was, obviously, very powerful testimony about the vulnerability of homeowners at this time. And if I may just offer one comment or observation about the testimony of all of our witnesses, it just speaks to the very important need for us to avoid any future shutdowns of the economy. Of course, we need to practice hygiene and mask- wearing and all of the things to prevent the spread of the virus, but particularly for minority borrowers, based on the testimony that so many have offered here today, it just speaks to the importance of getting people back to work so that they can provide for their families and meet those payment obligations. Let me start with a question for Dr. DeMarco about the non- federally-backed mortgages. I think your testimony was that for those non-government-backed mortgages, those borrowers are actually experiencing a higher forbearance rate than federally- backed mortgages. Dr. DeMarco, what does that tell you about the marketplace and how the marketplace is responding without the HEROES Act? Mr. DeMarco. I think it is telling us a couple of things. I think it is telling us that what was in the CARES Act, the forbearance provisions in the CARES Act that had been implemented for federally-backed mortgages is a sound approach to dealing with this kind of situation, and that servicers that are not required under the CARES Act to provide this support are still utilizing those same tools to assist their customers in non-federally-backed mortgages. I think that servicers recognize in this situation that payment forbearance is an appropriate response to assist their borrowers, and, in fact, they are doing that, whether required by the CARES Act or not. So, this has really developed as a best practice that it is being utilized by servicers of non- federally-backed mortgages, very effectively, and as you noted and as I noted, at a greater rate than we see in the GSEs now. Mr. Barr. The HEROES Act, which, as you know, passed without any Republican support, contains some new parameters around options for homeowners experiencing difficulties. But apparently, the authors of the HEROES Act believe that instituting mandatory automatic forbearance for all borrowers and limiting loan modification options would benefit borrowers. Dr. DeMarco, how would these proposed sections of the HEROES Act impact a servicer's ability to work with their customer, and would they actually help or hurt American families trying to stay in their homes? And in the context of answering that question, could you talk about the importance of communication between servicers and borrowers? Mr. DeMarco. That is actually where I was going to start. I understand the intention behind wanting to create an automatic forbearance opportunity for borrowers. But there is actually, I suggest, something more important here that actually comes out of the work that Congress did in the Dodd-Frank Act and has been implemented since by the CFPB, but it was also part of the development servicer practice as a result of the Great Recession. Now, there is the importance of timely communication between a servicer and their customer, if the customer is having problems paying their mortgage. So we don't want to wait 60 days and say, ``Oh, well, we haven't had a check come in; we put them on forbearance.'' Servicers have to be and should want to be in contact with their customers before you get to 60 days, and want to understand what is the customer's situation so that they can, in a timely way, deliver an appropriate support or opportunity to help get that homeowner back on their feet. So, for example, the homeowner may have missed 2 months of payments for reasons having nothing to do with an economic disruption due to the pandemic, but for some other reason. And so, the servicer wants to get in touch with that homeowner, find that reason, and get to solving that homeowner's particular problem. That is why we should suggest that the idea of making sure the servicer is actually staying in contact with their customer and the customer is staying in contact with the servicer is going to yield a better outcome for the various situations that we are going to see here. Mr. Barr. My time has almost expired, but I think it is important to recognize that different homeowners face different difficulties, and a one-size-fits-all approach may not be better. And if we can get folks into repayment quicker, we should do that. And, finally, what we did in the CARES Act or how much forbearance requirement or forbearance is allowed in these cases, nothing can replace getting people back to work and getting kids back in school so people can take care of their mortgage obligations. Thanks so much, and I yield back. Chairman Green. The gentleman's time has expired. The Chair now recognizes the gentlewoman from Ohio, Mrs. Beatty, who is also the Chair of our Subcommittee on Diversity and Inclusion, for 5 minutes for questions. Mrs. Beatty. Thank you so much. It is certainly my honor to be on this subcommittee, and I thank you and Ranking Member Barr, and I certainly thank our Chair of the Financial Services Committee, Chairwoman Waters, and Ranking Member McHenry. First, let me say to all the witnesses, thank you for your time and for your testimony. My first question--I am going to try to get through several questions, so, if I kind of put my hand up or move on, please excuse that, it is just because of the timer. This question is for you, Ms. Cohen. As you know, the CARES Act is very explicit about the protections Congress intended for homeowners with regards to forbearance. Borrowers experiencing financial hardship due to COVID-19 were to be provided forbearance for 180 days with the possibility of an extension for another 180 days. Despite this, I have gotten calls, dozens of calls, and they are confused about what the law said and what my constituents' mortgage servicers were offering in that way. As you know, we passed the CARES Act on March 27th. Can you tell me, despite the confusion going on in the marketplace that we all knew about--where was the CFPB, who has oversight of the mortgage services industry, and why did it take us until June 4th? Ms. Cohen. Thank you for your question. In terms of the complaints that you are hearing, we do have some good protections in the CARES Act. And the Federal regulators only need to step up their game and do much greater oversight of the servicers. In terms of the CFPB, they appear to have spent most of their time relaxing regulations for servicers and providing advice for homeowners. Homeowners need protection. Mrs. Beatty. Do you think they should have been doing more? I get the relaxing part, but people are still hurting, and they have oversight. Yes or no? Ms. Cohen. Yes, the CFPB should do more, starting with making sure people don't face foreclosure until they get help. Mrs. Beatty. Thank you. Let me move on to the next question. Mr. DeMarco, this question is for you. Earlier in the week, and maybe you have seen this article, ProPublica published a story entitled, ``Trump Financial Regulator Quietly Shelved Discrimination Probes into Bank of America and Other Lenders,'' which found that the Office of the Comptroller of the Currency (OCC) halted or stalled at least six investigations into discriminatory mortgage redlining against the recommendations of their own career staff. This was the same time and the same agency that was working to undermine and water down the Community Reinvestment Act (CRA), which is supposed to protect against that type of discriminatory lending. In this article, they found that the OCC had found patterns of discriminatory lending against African Americans and Latinos in several lending institutions, in several areas around the country. It also listed a whole lot of other things that were shelved. Mr. DeMarco, many of the lending institutions identified in the articles are members of those associations you lead. Can you tell me your response to this, and what are you doing to ensure that members of your organization are not perpetuating the social and economic injustices that African Americans and other minorities continue to face? This is very troublesome to me. Mr. DeMarco. Certainly, and I would understand that Mrs. Beatty. Forgive me, I am not aware of this article. I have not read it or seen it, so I am at a disadvantage there. But I will take what you said, and certainly, I would be concerned about those sorts of issues. I am sure if any of my member companies are named in that article, that they are looking at what is going on here, and I would be happy to go and take a look. Mrs. Beatty. Thank you so much. Let me go to the chairman. Mr. Chairman, I would like to request that the committee use its powers and resources if necessary to subpoena documents from the OCC related to previous lending discrimination investigations, and seek depositions of senior leaders of the OCC, including the Director himself, Joseph Otting, to get to the bottom of these allegations. We have been hearing them. It has been talked about, and I am sorry that Mr. DeMarco is not familiar with the article. I will have my staff also send that. And my time is up. I yield back. Chairman Green. Your request is duly noted and will be acted on in the due course of events. The Chair now recognizes the gentleman from New York, Mr. Zeldin, for 5 minutes. Mr. Zeldin. Thank you, Mr. Chairman. I appreciate the testimony here today. Thank you to Chairman Green and to Ranking Member Barr and Chairwoman Waters, as well. I appreciate all of you holding this hearing. I have the honor and privilege of representing the First Congressional District of New York, which covers most of Suffolk County. Suffolk County is one of the most expensive places to live in the country, so affordable mortgage options are essential to my constituents. We are here today to discuss mortgage servicers who play a client-facing role in mortgage finance. On April 10th, I spearheaded a letter to Secretary Mnuchin with 19 other members of this committee. The letter highlighted the need to ensure adequate liquidity for mortgage servicing because residential mortgage servicers are typically obligated to advance payments of principal, interest, taxes, and insurance on to investors and municipalities and insurers, whether the borrowers make those payments or not. If a homeowner falls behind on payments, it is the servicer's role to work with the borrower and find ways to get them back on track through loan modifications. In the CARES Act, Congress decided that a nationwide, broad-scale forbearance program was needed, but it was important that steps were taken to buoy the market if forbearance take-up rates continue to skyrocket. Mortgage servicers have a vital role to play in helping borrowers, but cannot shoulder the entire onus of government actions to protect the American homeowners impacted by COVID-19 if they do not have access to the needed liquidity to execute on those government actions. I am pleased that Federal agencies have focused on this and continue to work with servicers on how best to serve homeowners. FHFA and HUD issued guidance and scripts to be distributed to mortgage servicers. These step-by-step instructions have helped to guide servicer discussions with borrowers. Additionally, the GSEs and Ginnie Mae have provided assistance to servicers dealing with loans in forbearance. Meanwhile, the New York attorney general, on April 24th, called for mortgage servicers to, ``automatically waive late fees and place homeowners in 3-month forbearance as soon as a payment is missed, whether or not this action is requested by the homeowner.'' Dr. DeMarco, my question first for you is, should borrowers be automatically enrolled in forbearance, or is it better for the borrower to speak with his or her servicer first regarding the best options for his or her situation? Mr. DeMarco. I think it is definitely better for the borrower to speak with their servicer as soon as they have any issues with making a mortgage payment, explain what those issues are to the servicer, and the servicer may work with the borrower to determine what is the appropriate course and the best course for that particular borrower's circumstances. Ms. Cohen. May I respond to that? Mr. Zeldin. Please. Ms. Cohen. Because the subject came up twice, I will do it quickly. We agree that people should try to talk to their servicers, but as I stated before, more borrowers are not paying their mortgages than are making forbearance arrangements with their servicers, according to the U.S. Census Bureau. People who are already late on their mortgages have taken a hit on their credit, and they shouldn't face foreclosure, and they should get more assistance. Thank you. Mr. Zeldin. Thank you. Dr. DeMarco, forbearance take-up rates seem to have leveled off for now. What is your assessment of the servicer liquidity situation? Mr. DeMarco. I think that, as a result of the administrative actions that you mentioned, particularly by FHFA and HUD, as well as some actions by the Federal Reserve and the mortgage-backed securities market, the liquidity situation has stabilized. And the interesting thing here is by regulatory actions that put guardrails around or limits around the servicers' liquidity responsibility on any given loan actually enabled the private market to step in and provide additional liquidity. Once we had greater certainty about what the rules of the road were going to look like in terms of the answers and what the duration was going to look like, the markets actually stepped in. And we still believe that the Federal Reserve and the Treasury can and should be ready to step in as needed if the situation turns worse again and liquidity is needed for nonbank services. Mr. Zeldin. Thank you. My time is running out, so I just want to thank again all of the witnesses for being here. To Chairwoman Waters, Chairman Green, and Ranking Member Barr, it is great to see all of my colleagues here. I look forward to seeing you in person. I hope you and your families are healthy. To all the staff on the call, thank you for what you do to make this hearing possible and for your service to the Financial Services Committee. I yield back. Chairman Green. The gentleman's time has expired. The Chair now recognizes the gentleman from Massachusetts, Mr. Lynch, who is also the Chair of our Task Force on Financial Technology, for 5 minutes. Mr. Lynch. Thank you very much. I appreciate you holding this hearing, Mr. Chairman. I guess, I would like to look further out in terms of, in January or when we--hopefully when we start to come out of this lockdown, especially in the southern States, what does the transition look like in terms of recognizing the inability-- well, recognizing the tremendous pressure that has been put on individual homeowners, in banks, local community banks, what does that transition look like in terms of trying to slowly, incrementally get us back to where there is full opportunity for people to catch up on their mortgage payments, in some cases, reengineering some of the mortgage products that are out there or reconstituting the mortgages that are on property that are inadvertently falling behind? How does that all come together? And is it the mortgage servicer or is it--obviously, the mortgage servicer has obligations to the shareholders. So, I am little bit unclear on how we can reengineer this in a way that doesn't put the homeowner or the renter, in some cases, at severe risk. Let's say the President pulls off the emergency status, and by Executive Order might end all of the support and relief that we have been providing, what does that look like, and how do we help those people transition slowly back to some semblance of normalcy? Mr. DeMarco. I will be glad to take a crack at that, Congressman. With 4.8 million households in forbearance, you can imagine that not everyone is going to come out of forbearance in the same situation. Over the last few months, I think between FHFA, the GSEs, FHA, and I don't want to leave out VA and USDA, there has been a lot of development about refining for servicers the guidelines of these programs for what that post-forbearance looks like, but I think across all of them, it can be simply boiled down into, broadly speaking, three buckets. For a borrower who comes out of forbearance and actually has the capacity not just to continue to pick up their mortgage payment, but to make a greater payment, they may determine they want to be on a short-term repayment plan and get caught up faster. For a lot of borrowers, if they get back to work, they can resume their pre-pandemic mortgage payment, but can't pay more than that. In that case, for most of those borrowers, their forborne payment is going to get added to the end of the loan-- life of the loan to be paid then and then resume a normal payment, but for those whose income has been permanently disrupted, they can't go back to their prior payment, we are going to be able to do a loan modification where we get a way of getting them caught back up by redoing the loan using loan modification terms. That is it, briefly. Mr. Lynch. Okay. So you don't anticipate any objection on the part of some of the shareholders that are due payments from the mortgage servicers, and you don't expect any action that we would have to take in order to make that happen? It is already in place? Mr. DeMarco. Certainly, with the-- Ms. Cohen. I can take that. Mr. DeMarco. Okay. Ms. Cohen. Just briefly, what we saw in the last crisis and what we continue to see is that, as you said, Mr. Lynch, servicers on private mortgages are beholden to the guidelines from the investors, and so what we would like to see is a safe harbor for mortgage servicers from investor liability so that they can provide loan modifications along the lines that the GSEs and FHA and the other government agencies can provide that are sustainable. I would add that these issues are unprecedented and we don't yet know whether the loan modifications being offered will be affordable to enough people. Mr. Lynch. Okay. That is a perfect answer. That is what I wanted to know, in case we need to create a safe harbor to allow the loan servicers to give a break to some of these mortgage holders. We need to collaborate on that. I think that would be a win-win all the way around, but thank you very much. And I yield back. Chairman Green. The gentleman yields back. The Chair now recognizes Mr. Rose for 5 minutes. Mr. Rose. Thank you, Chairman Green and Ranking Member Barr, and thank you to our witnesses for testifying before the committee today. Currently, as we know, approximately 4.1 million homeowners are in forbearance plans, some due to the uncertainty surrounding COVID-19. Reports have shown that a large number, however, have continued to make payments even after requesting forbearance. That number has dropped sharply between March and June, though. Back here in Tennessee, folks are ready to get back to work, and I believe we need to do so as quickly and safely as possible. Dr. DeMarco, why did some people opt into forbearance but continue to pay down their principal, in your opinion? Mr. DeMarco. Congressman, I am not sure there is one explanation for that. In some cases it might have been a timing issue. Maybe they weren't sure whether they got the request in on time for that first month. In other cases, I believe, and this may be the majority, that the consumer wasn't exactly sure what their economic situation was going to be. Maybe they had a lot of uncertainty at work, and they wanted to get on forbearance quickly, so that they had that. And then once they realized that, in fact, their circumstances were okay, they may have ended the forbearance or others may actually have needed it and have started to take advantage of it since, so I think there are multiple reasons here. Mr. Rose. Are there any adverse consequences to asking for forbearance being approved, but then not taking advantage of it? Mr. DeMarco. You have to have an economic hardship resulting from the pandemic in order to ask for the forbearance, but if you ask for forbearance and continue to make your mortgage payment, no, there is no adverse consequence for you. Mr. Rose. Do you believe, Dr. DeMarco, that getting Americans back to work would decrease the number of borrowers who actually need to be in forbearance? Mr. DeMarco. Certainly, Congressman, the more people we get back to work, the more they are going to be able to pay their mortgage, and the fewer are going to need forbearance, yes. Mr. Rose. The CARES Act required unconditional forbearances of voters experiencing trouble due to the pandemic. However, those provisions only covered federally-backed loans. Dr. DeMarco, how have the private mortgage servicers changed their practices to help keep families in their homes? Mr. DeMarco. They are generally doing the same thing as the servicers of federally-backed mortgages. They are offering mortgage payment forbearance to their customers who contact them and declare they are having a financial hardship due to the pandemic. As a result, the rate of those loans in forbearance is actually greater than the GSE loans. Mr. Rose. Interesting. Ms. Cohen. Mr. Rose? Mr. Rose. Yes. Ms. Cohen. One thing I wanted to point out is that most private servicers, if they have an investor that they are servicing for, they are advancing payments, so at about 120 days of forbearance, they are much more financially strapped. And we are concerned that 90-day forbearances aren't going to go to 180 days in the private market and that is going to present a significant problem. Mr. Rose. Thank you, Ms. Cohen. Mr. Williams. And, Mr. Rose, excuse me, the National Association of Real Estate Brokers, in our statement, we have addressed that as one of our five solutions that private servicers need to adhere to the GSE and FHA guidelines-- Mr. Rose. Thank you. Ms. Griffin. I would also like to add-- Mr. Rose. Let me go ahead to some other questions-- reclaiming my time. Dr. DeMarco, what other efforts have you seen industry stakeholders make to protect homeowners? Mr. DeMarco. I think that they have done a great deal to set up on their websites clear information for borrowers to understand what their options are. They have made a tremendous effort to shift all their servicing operations to the individuals' homes. They had to do the technology and the security around that to make that happen. I think those have been terrific efforts that servicers have made. And the other is, they are proactively reaching out to their customers to find out what their situation is and to make sure that they are getting the right tools to help them in their situation. Mr. Rose. Thank you. Throughout the pandemic, I believe, that the Trump Administration has continuously rolled out updated guidance for industry stakeholders. Dr. DeMarco, in the few seconds we have--well, it doesn't look like we have enough time, but I would, if time permits later, love to hear your assessment of how the agencies have assisted with the implementation of the CARES Act. And with that, I yield back, Chairman Green. Chairman Green. The gentleman's time has expired. The Chair now recognizes the gentlewoman from New York, Ms. Velazquez, who also happens to be the Chair of the House Small Business Committee, for 5 minutes. Ms. Velazquez. Thank you, Chairman Green, Chairwoman Waters, and Ranking Member Barr for this important, quite timely hearing. This question is for the panel. Recently, companies and organizations like the Center for Responsible Lending, the National Association of REALTORS, and Quicken Loans have all come out in opposition to the Trump Administration's plan to weaken the disparate impact rule; thereby, making it harder to pursue housing discrimination cases. Several other groups have come out in opposition to the proposed changes as well. So with a quick yes or no, does anyone believe now is the time to weaken housing discrimination rules? Ms. Cohen, let's start with you. Ms. Cohen. No. Ms. Velazquez. Ms. Griffin? Ms. Griffin. No. Ms. Velazquez. Mr. Williams? Mr. Williams. No. Ms. Velazquez. And Mr. DeMarco? Mr. DeMarco. No, we don't want to weaken housing discrimination rules. Ms. Velazquez. Thank you. Ms. Cohen, while the FHA has provided some guidance to FHA servicers regarding the implementation of the CARES Act related to the forbearance, a recent HUD OIG report found that, ``about 90 percent of FHA loans provided incomplete, inconsistent data, and unclear guidance to borrowers.'' Do you think further guidance from the FHA to servicers regarding forbearance is needed? Ms. Cohen. Yes. FHA should provide further guidance and so should Congress include it in the next package, both about websites, written notice, and oral notice. Ms. Velazquez. And why do you think the FHA hasn't issued such guidance? Ms. Cohen. I can't answer why FHA has not done that. I will say that I agree with Dr. DeMarco that they have done a really incredible job of putting out a lot of guidance and they just put out a lot of new rules, which, hopefully, will make loss mitigation more affordable for more people. Ms. Velazquez. Thank you. Ms. Griffin, what has your organization seen in terms of servicer communications to borrowers about having to pay a lump sum payment at the end of the forbearance period? Do you feel misinformation about repayment options is discouraging borrowers from accessing the forbearance relief afforded to them under the CARES Act? Ms. Griffin. Absolutely. The people that we talk to are frazzled about this lump sum payment. Few of them have actually even heard of the 180 days, let alone a year. So, it is causing really a lot of undue headache in these communities, and the borrowers are really concerned about their ability to pay, even at some point, let alone after 90 days. They are concerned that when they are going to work and, yes, the question earlier, yes, when employment increases, things will be a little bit better, but right now these homeowners are frazzled-- Ms. Velazquez. Thank you. Ms. Griffin. --despite everything with the servicer-- Ms. Velazquez. Thank you. Ms. Griffin. --they are not getting the right information. Ms. Velazquez. Thank you, Ms. Griffin. Yes, Mr. Williams? Mr. Williams. Just to dovetail on what Ms. Griffin said, that we basically need more awareness, the borrowers need to know that their rights are protected. We need to promote on TV, on the radio, and even email. They need to know they are protected because it is folklore right now. Ms. Velazquez. So whose responsibility it is to get information out? Who is failing? Mr. Williams. The servicers and the government right now. We are spending a lot of money, as we said in our statement, a lot of money on-- Ms. Velazquez. Thank you. Mr. Williams, many individuals with mortgages currently in forbearance might still be unable to make their payments when their forbearance protections under the CARES Act expire. Based on what you have seen over the past few months, are you concerned about servicers' ability to work with borrowers to keep them in their homes after their forbearance period ends? Mr. Williams. I am very concerned. I have two witnesses, two people that I know who said that--one servicer said they didn't work with the program at all. It is a variable note. So, that is what they told this lady, that they didn't work with it at all; they would not be able to. Another servicer gave the person, the borrower, 90 days, 3 months, and they have a payment of $17,000 at the end of that-- Ms. Velazquez. Thank you. Mr. Williams. --so I am extremely concerned. Ms. Velazquez. My time has expired. Thank you. Chairman Green. Thank you. The gentlelady's time has expired. The Chair now recognizes Mr. Timmons for 5 minutes. Mr. Timmons. Thank you, Mr. Chairman. It is good to be with you all, even if it is on a conference video. I appreciate you having this hearing. We need to get this right. Just in January/February, we are experiencing some of the lowest unemployment in the history of South Carolina, in the history of our country, and COVID-19 has just changed everything. So, the Federal Government did what it could. The CARES Act had a lot of great things. It was hurriedly put together, and I think overwhelmingly, it was in the right direction. We are going to make sure we get the next package right. Phase four needs to be tailored to those who need it and people who are still struggling from unemployment or with other economic challenges. We need to make sure that we get them the help that they need. We are expecting a vaccine here in December, January, February, March, April, the sooner the better, in my opinion. I am sure we will all agree on that. I am probably going to be one of the first people to get it because I am in the National Guard, so I hope they get it right the first time. Mr. DeMarco, I am concerned that in October/November, we are going to hit our 6 months and we are going to have a lot of people who are still unemployed who are going to continue to have challenges making their payments. What policies do you think we should be considering to address that? Mr. DeMarco. For those in federally-backed mortgages, which is the majority of homeowners, if they get to 6 months and they still are experiencing an economic hardship because of this pandemic, then they should be in touch with their servicer requesting an additional extension of their forbearance period. In that sense, the answer is already there. The larger question is getting people back to work, and balancing and dealing with both the health issues our country is facing as well as the need to get the economy going. Mr. Timmons. We are dealing with that exact issue here in South Carolina. And the issue is, if you are older or have an underlying health condition, we need you to protect yourself and we need to make sure that you are able to protect yourself. You are not worried about having your credit ruined or risking your safety going back to work, but if you are healthy and you have a lower risk factor, we need you to get back to work, because ultimately, getting the economy restarted and getting the vaccine is what is going to get us through this. Ms. Cohen. Mr. Timmons? Mr. Timmons. Yes, ma'am. Ms. Cohen. I just wanted to supplement what Mr. DeMarco said. We do want to see people get back to work when it is time to do that and they are healthy, but one-third of the mortgage market is not government-backed loans and so we want to make sure that those people can get affordable loan modifications if they need them after their forbearances so that we can see increased employment and decreased foreclosure, including in the upstate where you live. Mr. Timmons. Yes, ma'am. I appreciate that. Honestly, it was remarkable to me. I had so many individuals calling and talking about this issue we are discussing of a balloon payment at the end of the forbearance period, and I had a call with the bankers and the credit unions immediately the next day, and I just wanted to make sure that was not going to be the case anywhere. Obviously, it is unacceptable. And I think the adverse impact on the perception of any entity that is not providing the forbearance necessary to those who need it is sufficient, the PR hit would be not worth the rub. But on to a different subject. As you all know, the FHFA and the GSEs have adopted temporary origination policies for the largely remote and virtual environment we find ourselves in. This has applied to appraisals, underwriting, and remote online notarization. This has been hugely helpful, in my opinion, to help maintain the health of the housing market during the pandemic. I would like to ask each of you, yes or no, do you think these remote policies, which are set to expire August 31st, should be made permanent? I will start with Dr. DeMarco. Mr. DeMarco. These policies have certainly helped keep the mortgage market going, and yes, in one form or another, we would like to see some of these--certainly things like the remote online notarization be made permanent. Mr. Timmons. Mr. Williams? Mr. Williams. I believe some of those programs, some of those options should be made available and be made permanent. Mr. Timmons. Thank you. Ms. Cohen? Ms. Cohen. Yes. We think those are important programs, but we need to make sure they are only used in certain circumstances and we need to make sure that appraisals are still reasonably accurate. Mr. Timmons. Absolutely. I think we can agree on that. Mr. Chairman, again, thank you for having this hearing and I look forward to working with you on this issue. I yield back. Chairman Green. The gentleman yields back. The Chair recognizes Mr. Perlmutter for 5 minutes. Mr. Perlmutter. Thank you, Mr. Chairman. And I have to say, I subscribe to much of what Mr. Timmons had to say, and a pretty realistic view of what we are facing in the questions that he asked. And I had taken some--not offense, but I differed with Mr. Barr as he started off his remarks in saying this economic situation we are in is as a result of a government-mandated shutdown. The bottom line is, this is COVID related, and we don't have it under control. This thing is going to continue to evolve. It is going to be difficult in we don't know how many different ways. And as Mr. Timmons was saying, and I think all of us believe, each of us has to provide some kind of latitude to others for all of us to get through this thing. So, 37 States in this past week have seen increased numbers of infections and hospitalization, so we are not out of this by any stretch of the imagination, and I think that the housing industry, the mortgage industry is going to continue to be roiled by this for some time. So, I think this is going to evolve. I would ask Ms. Griffin and Mr. DeMarco, there are provisions in the HEROES Act that contemplate the fact that we are not out of this virus yet, and at the end of this month, the pandemic unemployment insurance runs out. We see a lot of the funding for the PPP loans will have been exhausted by individual businesses. We haven't done another stimulus or stability payment. If this virus continues to roll as it has, and I will start with you, Ms. Griffin, are we going to need to implement some things in the HEROES Act so people can pay their mortgages? Forget about forbearance for a second. I think we would all like them to pay their mortgages. Ms. Griffin. Absolutely. The reality is that the more help we can give to homeowners, the better. They are going to absolutely need it, as you just said. This situation is not getting better. It is getting worse. Certainly, consideration to helping homeowners, helping organizations like ours, and others that can help these homeowners get on their feet and work with these servicers, this is really critical. Our homeowners do not have--many of them, at least, don't have a grasp for what is next. And so the work--and I will just certainly say with the counseling organizations, that we can just kind of settle people down, give them direction, even help to provide advice and guidance about working with their servicer as well as how to enhance their own lives. This is what we want. And we certainly need to think about a HAMP-like program that was very affected the last time. I think that this will be very effective going forward, and this is something that we would really, really encourage. Mr. Perlmutter. And I thank you for that. Ms. Griffin, I think, you hit the nail on the head. When you have uncertainty and you have fear in an economy, it slows the economy down. No ifs, ands, or buts. There needs to be some level of certainty, and to try to hopefully, get a vaccine as soon as we can or make some technological breakthroughs in therapeutics to take away the fear. But Dr. DeMarco, what do you think we are going to need, assuming that this virus isn't extinguished or isn't fought off by a vaccine for 5, 6, 7 months? Mr. DeMarco. Mr. Perlmutter, I agree. This is a big-picture question about our economy. It is about small businesses, and even large businesses that are suffering because of how the pandemic intersects with those industries and those businesses. It is causing great hardship among families because of the furloughs and the unemployment that is resulting from that. So, this is a big macroeconomic challenge and that is a bit outside of my scope, but I would say that I understand that Federal Reserve Chairman Powell has been up before Congress recently, talking about the need for continued fiscal support in face of how the pandemic and the economic response to it is affecting our economy, our businesses, and our workers. And so, I don't have a particular prescription, but to say that I think Chairman Powell certainly identified that as a role for Congress. Mr. Perlmutter. Thank you. And I yield back to the Chair. Chairman Green. The gentleman's time has expired. The Chair now recognizes Mr. Taylor for 5 minutes. Mr. Taylor. Thank you, Mr. Chairman. I appreciate this hearing. I think this is a very important topic and I think we have been--I get a lot about the individual impact and I think all of us, as Members of Congress, see that every day in our districts. I was at a food bank this morning in Allen, Texas, and just watching the real need in our communities has deeply affected me. I want to take a second and kind of step back and talk about the macro for a second, talk about the big picture. Right now, about 8 percent of the home mortgages in the United States, according to the data I have seen, are currently in forbearance. And just thinking about what that could mean if there wasn't forbearance. Let's just kind of take that for a second, and say if there wasn't forbearance, my guess is that would mean about 8 percent of the homes in the United States would be foreclosed within the next year. And then, when they go to sell those or liquidate those, it would basically collapse the real estate market. So, home values would collapse across the country because you have a tremendous amount of foreclosures, and I am saying that based on the experience that Dallas, Texas, went through, and Texas as a State, during the 1980s. I remember the savings and loan crisis and you watched a tremendous number of foreclosures with the Resolution Trust Corporation (RTC), what are referred to as the RTC days in Texas in the 1980s and early 1990s. And the liquidations were such that things were literally-- office buildings were trading for $10 a square foot, people literally could take retail properties just by paying the taxes. So I just wanted to know if any of you have any thoughts about what if we didn't have forbearance, how bad would it be for the housing market in this country, when the valuation side in 12 or 24 months, once you had a bunch of liquidations, then collapses in values? Mr. DeMarco, do you want to speak to that? Mr. DeMarco. Congressman, it certainly would be bad. I don't know how to size it any differently than you just did. It would be bad. It would also--one of the things that forbearance has accomplished is it has assisted in the response to the health crisis by allowing people to be able to stay home to quarantine, or whatever the particular standard is in a community to help suppress the virus. It is helping combat the virus, recognizing we are providing economic support to that household or those workers because they are not going to be able to pay their mortgage. So, there is not just the economic toll and what happens in the real estate market, there is also the question of the health impact, and we create an incentive where people feel they have to go back to work, even if that is not coinciding with good health practices in this environment. Mr. Taylor. Sure. Mr. Williams, do you want to talk about what we are trying to stop from happening here? Mr. Williams. I do. It would be horrific. But what happened to--when I went to school, they taught me the three important necessities in life were food, clothing, and shelter. Well, how did we get to bailing out the airline industry before we look out for the homeowner? I just feel that if we don't do something, if we don't act, if we don't get everyone involved and get on the same page in the program, if we don't move quickly, then we are going to be in for a huge, huge problem. Ms. Griffin. Absolutely. If I could add to that--well, first of all, the forbearances have provided a profound help to homeowners. Without it, we would be inundated with foreclosures where there is a possibility we are headed towards that and we certainly need to work together. But without question, for people of color, for these vulnerable communities without the forbearances, without the work that we are doing together, there would be a whole other generation of loss of wealth. It is bad now, it appears to get worse, and hopefully we can sort of work together to stem this tide. Mr. Taylor. Ms. Cohen, do you want to make any comment on, again, the macro situation? It seems like there is consensus that we are avoiding a macro catastrophe by trying to use forbearances and mechanisms to get to the other side. Ms. Cohen. I agree with that, Mr. Taylor. I think what we should also keep in mind in this macro situation is, who isn't making their payments and doesn't have a forbearance, and what is that going to do to the economy and to property values as well, and how can we collect enough data that we understand what is going on so we can prevent a catastrophe? Mr. Taylor. Sure. And in my final few seconds, I will just point out that I am working with a lot of members on this committee on both sides to try to work on forbearance or trying to help within the commercial real estate space because we have done a great job. We have heard that on the home side. There is much work to do, but we are headed in the right direction, but in commercial real estate, I am very deeply concerned that we are about to have a foreclosure crisis-- I yield back, Mr. Chairman. Thank you for indulging me. Chairman Green. The gentleman's time has expired. The Chair now recognizes Ms. Tlaib for 5 minutes. Ms. Tlaib. Thank you so much, Mr. Chairman, and thank you so much for this really critically important hearing. I know Chairman Al Green has come to my district and actually deeded tower of housing justice tour and saw that, even in the last recession, just how much communities are still suffering. So many of my residents, especially throughout Wayne County, have been in survivor mode. They have been living paycheck to paycheck, and in just one of my cities, in the City of Detroit, 88,000 people were evicted out of their homes. So, for this to happen in a pandemic is not in control of any of us, right? This is very much something that came about, that I don't think any of us could have truly been able to truly prepare for, especially in the housing mechanism. I don't know about the healthcare, but especially with housing. And so, I want to talk about this. I think this is really critically important, and I think my colleague, Mr. Taylor, was talking about this. Forbearance and these kinds of moratoriums on water shutoff, utility, student loans, mortgages, they are just band-aids, because all of that money is going to be due when the forbearance is up. So, what are we going to do then? I want to start with Mr. Williams. You know from many of your clients and even in your membership, because what I hear from my residents is, why aren't we doing recurring payments? Why aren't we doing something as aggressive and bold as we are doing for airlines and other industries? Why aren't we having a peoples' bailout where we are looking at recurring payments so that people can pay all this debt down because, again, some of these jobs won't come back, but even if the jobs come back, they are not going to have the lump sum ready to go to be able to pay it off. They still might end up losing their homes. Can you talk a little bit about that? Mr. Williams. Sure. You are absolutely right, but that is why we asked for that five-point plan. We had some serious solutions that we want you all to really seriously take a look at, because that is the direction we feel we should go in. We have been decimated. This is a critical time. It is time for action. It is really time for action. Ms. Tlaib. No, no. I appreciate you bringing up my Black neighbors, because we lost more Black home ownership in Michigan than any other State, about 40 percent. Ms. Cohen, you have been very thoughtful in how you have talked about these issues and the fact that we still are leaving a lot of our neighbors across the country, homeowners, behind in the way we are approaching this. I don't know if you are familiar with the Automatic Boost to Communities Act that I introduced, but it would be recurring payments of $2,000 per month on a recharged debit card. Do you think that will help with some of the issues we are seeing with people possibly losing their homes because of this pandemic? Ms. Cohen. Thank you for your question, Ms. Tlaib. I am not familiar with it, because I live in my little universe of housing legislation, and I can talk to my colleagues about it, but the biggest problem with financially strapped people is that they are financially strapped. And so they are living on the edge and they need cash in addition to needing help from their servicers and from all of their other creditors. And so, anything we can do, to do that, will move things in the right direction. People should also look closely at legislation around that Homeowners Assistance Fund, because States can also administer programs to hit the hardest-hit areas in ways that might be constructive. Mr. Williams. Also, Congresswoman, getting the word out so that the homeowner or the borrower is knowledgeable enough about the program. This has the same effect as the PPP, where huge companies got all this money and then we didn't get it, because we weren't-- Ms. Tlaib. Mr. Williams, even with the PPP and my incredible colleague, Ms. Velazquez, has been so much on the-- bringing the voices of small businesses, but it is so cumbersome. Let's be honest, the servicers are playing games with peoples' lives. With some of them, if you are not actually saying the correct word, if you do not request it in a certain way--as a Member of Congress, myself, and I know I am new, but I have to pick up the phone and call a servicer and say, why did you tell my resident they don't qualify, when according to the legislation we passed they do qualify? Well, they need to say it this way. This is not a game. They obviously can't pay, so let's put that as an option and stop playing games with people who really--they are going to lose their home. These are not people who want to lose their home. They just don't have the capability of doing it, and I am tired of people pretending that it is because of economic shutdown or all these other--we did this to them. We put them in survivor mode. They have been literally one emergency away, and now the pandemic has happened, but they were one emergency away from going into poverty. So I think it is our responsibility to put people first, and I thank all of you so much, but I think we really need to talk about it--we talk about this program and, of course, we need all of those programs in the five points, but we need recurring payments. Enough. Other countries are doing that. They are giving people human dignity. Let them choose what they needed for their family and recurring payments, I think, is going to be key here. Thank you so much, Chairman Green. It's always a pleasure to work with you. Thank you. And I yield back. Chairman Green. The gentlelady yields back. The Chair now recognizes Ms. Dean for 5 minutes. Ms. Dean. Thank you, Mr. Chairman, for calling this important committee hearing. And I thank Chairwoman Waters as well. I also thank Ranking Member Barr, and Mr. Barr, you and your family are in my prayers, and you have my sympathies on your recent grievous loss. I am really pleased to be here to talk about this and know that the lens that I am looking through what we are talking about here in terms of folks and their mortgages in precarious places, is one from what lessons did we learn from the past? What did we learn from 2008? I was not in Congress then. Like Representative Tlaib, I am a freshman, but as Representative Taylor talked about, we have 4 million mortgage loans in forbearance, as our witnesses have told us. Many people are not in forbearance and are missing payments, so we have a gaping hole there and we put together information and important protections through the CARES Act and we want to do even more through the HEROES Act. We need to get people the protections they need to keep the roof over their head to protect their credit, and protect their family. Mr. Williams, I would like to start with you. You have already talked about this, but you are concerned about what mortgage servicers are and are not doing to protect borrowers in terms of whether it is communication or reaching out when a payment is missed to find out what is going on to see if actually they should be put into the forbearance. What other things do you think need to be done in order to get protection, forbearance to as many borrowers as possible? Mr. Williams. I think we need to have some communication going out from the servicers. They need to put it in their mailings, emails. Hey, this should be a commercial on television, getting this information out. I think that we hinder ourselves. I think that they are limited in giving information for the servicers like diversity as well. So, those are the important things, I think, right off the bat that we need to increase our communication to the borrower. Ms. Dean. Absolutely. Ms. Griffin. And I would like to add in there also, get and complement. The outreach is critical. What we have found from the past foreclosure crisis was that people are--they really need some guidance, they really need some help. And even if the servicers send out information, it needs to be clear, it needs to be simple, and without question. We really need to have some advocates in the mix that can be able to explain things to these borrowers whom, as you said, Congresswoman, they are on the edge and really just need some guidance. So the outreach is certainly critical, and the hand-holding is also critical. Ms. Dean. I appreciate that. Ms. Cohen. Ms. Dean, can I just say one other thing? I agree with Mr. Williams and Ms. Griffin, but the servicers don't have the capacity to do the level of default servicing that we are going to see. They didn't do it well in the last crisis; they are not doing it well now. It is great if you can get onto a website and you don't need much from them, but if you actually need something from them, it is more complicated. So, we can't put the onus just on the homeowner to understand and reach out. We need automated systems and we need to make sure that people are offered what they need without having to go through a lot of red tape. Ms. Dean. Ms. Cohen, that is a perfect segue. I wanted to ask you next, what are the lessons that we learned in the past, that I desperately hope we do not repeat in this economic collapse? What are some of those lessons? Ms. Cohen. Thank you for the question. The first one is, people need affordable options when they can't pay their regular mortgage payment. That is one of the good things that came out of the last crisis, was the general understanding about that, but we don't know whether the programs we have now will be affordable. Second, when you have a crisis in Black and Latinx home ownership that has been exacerbated by the current crisis, you need to look freshly at what the problems are and what the solutions are, and to ask yourself whether we need to start something new. Ms. Dean. Let me ask you, in my final seconds here, you talked earlier in your testimony about the CFPB and that they need to help people avoid foreclosure. What is the responsibility of the CFPB? What could they be doing proactively, because we see the number of complaints just going through the roof with the CFPB? What should they be doing to help people avoid foreclosure? Ms. Cohen. I had a pretty long list in my testimony, but let me give you two. First, work with the Federal Housing Finance Agency on the Borrower Protection Program, provide transparent data, learn from the consumer complaints, and take action against companies that are misbehaving. Second, right now they have an interim final rule that they put out. They need to protect people against foreclosure, which they haven't done. Thank you. Ms. Dean. I know my time has expired. Thank you, Mr. Chairman. Chairman Green. The gentlelady's time has expired. The Chair now recognizes himself for 5 minutes. I will tell you, friends, I was here in 2008, and I saw how we treated the big banks. The truth is this: They were overpaid. Overpaid in this sense: There were banks that said, we don't want that money. We don't want it to appear as though we need the money, but we imposed upon them billions of dollars. They were overpaid, but when it comes to the consumer, the consumer gets short-changed. The consumer has to jump through all kinds of hoops to try to get what Congress intended consumers to receive. So I am just appalled, to be quite frank with you, at the fact that the consumer always seems to find himself or herself groveling to a certain extent to get something that these big banks get as a matter of course. I am not opposed to big banks; I just want everybody to be treated fairly. This program, in my opinion, has no consequences. If these servicers misbehave, there are no consequences. It seems to me that we, in the future, will have to find a way to impose some consequences. My constituents, who have actually received this notice that is according them 3 months of forbearance when they are entitled to 180 days, now have to hire a lawyer if they want to pursue this. They can't get it done simply because they have made a fair and just request. They will have to go through some other extenuating circumstances. I would like to note that this would be submitted into the record, without objection. Without objection, it is so ordered. It always seems that people of color are having to account for themselves. We have to prove that people of color are being discriminated against, and this is not just as it relates to the financial services industry, it is across-the-board. People of color always seem to be at the bottom. At some point, we have to have a system, a justice, such that people of color will get the same treatment as other persons in this society. I think that what happened to George Floyd is exposing the underbelly of what is happening to people of color, and other people are starting to realize that it will take more than our hues and cries to get this done. It is my belief that there is systemic discrimination. Let me go to you, Mr. Williams, if I may, please, sir. Do you agree that there is systemic discrimination taking place in lending? Mr. Williams. I do. I totally agree. I see it often. We have some resolutions. But there is no better time than now to address the Black home ownership program. Chairman Green. Let me do this. Time is of the essence. Ms. Griffin, do you agree that there is systemic discrimination in lending? Ms. Griffin. Yes, there is. Chairman Green. And let me go next to Ms. Cohen. Do you agree that there is systemic discrimination in lending? Ms. Cohen. Yes, I agree. The CFPB found that for people with the same credit scores, Black borrowers were rejected for mortgages at higher rates. Chairman Green. And Mr. DeMarco, do you agree? Mr. DeMarco. I agree that we have certainly had a history of this and there seems to still be areas where it is an issue, yes, sir. Chairman Green. Well, if you agree that there is this systemic discrimination, I have proposed that we have a department of reconciliation with the responsibility of dealing with racism and invidious discrimination in this country. And it would deal with financial services, it goes into policing, and many other areas. If you agree that we have this problem, and we have had it for hundreds of years, isn't it about time that we do something other than what we have been doing? Would you agree, Mr. Williams, that it would be appropriate to have a department of reconciliation, which has as its responsibility to look out for people who are being discriminated against, and this would include the protected classes, look out for them and report to the President, through a Secretary of Reconciliation? Would you agree that such a position should exist, sir? Mr. Williams. Yes, sir, I agree wholeheartedly. Chairman Green. Ms. Cohen, where do you stand, please? Ms. Cohen. Yes. We think that is important and we think it is important to change-- Chairman Green. Let me move on. My time is of the essence. I am so sorry, Ms. Cohen. Ms. Griffin, where do you stand, please? Ms. Griffin. I fully agree that it needs to be monitored and there needs to be penalties. Chairman Green. And Mr. DeMarco? Mr. DeMarco. I have no opinion on a position like that, Congressman. I do believe we all have a responsibility to act. Chairman Green. Well, let me do this now that you have said this, Mr. DeMarco. All persons who are in agreement and you think that systemic racism and invidious discrimination as it relates to people, including the protected classes, should be handled with a department that specializes in this, kindly raise your hand, please. Raise your hand so that we may capture you all on screen. Okay. I see everyone's hands, save Mr. DeMarco. Would you do a screen shot of this please, staff? Thank you. My time has expired, and I would like to also include for the record, a statement from the Mortgage Bankers Association. Without objection, it is so ordered. Friends, if I may now bring this to closure. I thank all of you for appearing today, especially the witnesses. Thank you for your testimony and for devoting your time and resources to share your expertise with the subcommittee. Your testimony today has helped to advance the important work of this subcommittee and the U.S. Congress. The Chair notes that some Members may have additional questions for this panel, which they may wish to submit in writing. Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to these witnesses and to place their responses in the record. Also, without objection, Members will have 5 legislative days to submit extraneous materials to the Chair for inclusion in the record. This hearing is now adjourned. [Whereupon, at 1:50 p.m., the hearing was adjourned.] A P P E N D I X July 16, 2020 [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]