Royersford, PA, September 3, 2020 – ​Sen. Katie Muth (D-Berks, Chester,  Montgomery) Minority Chair of Housing and Urban Affairs, and the members of the Senate Democratic Caucus sent a letter to the Pennsylvania Department of Banking and Securities, fully supporting the recommendations delineated by Community Legal Services of Philadelphia (CLS). 

The joint letter outlines recent data and reports revealing that qualifying homeowners are being unjustly left out of the forbearance programs made available by the CARES Act.

According to a recent U.S. Census Household Pulse Survey, 13 percent of Pennsylvania homeowners with a mortgage were unable to pay their mortgage in May. But only 57 percent of those homeowners were enrolled in a forbearance program. The problem is much worse for homeowners of color as Black and Latinx homeowners are much more likely not to be enrolled in a forbearance plan that could help them save their home. That same Census data reveals that while 66 percent of white homeowners in Pennsylvania who reported being unable to make their May payment were enrolled in forbearance programs, only 17 percent of Black homeowners and 26 percent of Latinx homeowners were enrolled.

“It is not too late to take action to help homeowners enroll in mortgage forbearance programs to prevent a flood of avoidable foreclosures in Pennsylvania,” said Senator Muth, who supports the following recommendations by CLS, which ask the Department of Banking to use its existing authority under the Mortgage Licensing Act to ensure that mortgage servicers licensed in Pennsylvania are complying with the  CARES Act and other consumer protections statutes and regulations.

CLS recommends that regulated mortgage servicers should be required to: 

1. Certify that they are offering forbearance programs as required by the CARES Act.
2. Provide data, such as the number of homeowners with federally backed mortgages who are delinquent on their mortgages and enrolled in a forbearance and those who have not enrolled in a forbearance, so that we can better understand how this crisis is affecting homeowners. 
3. Provide complete, accurate information about the forbearance programs on their websites.
4. Notify all homeowners with federally backed mortgages, especially homeowners who are more than 30 days delinquent on their mortgages, of their eligibility for forbearance programs. 

In addition, the Department should notify regulated mortgage servicers that compliance with these requirements will be evaluated at their next licensing examination.

Implementing these recommendations helps Pennsylvanians stay in their homes, ensures compliance with federal regulation and statute, and benefits our Commonwealth’s economy by creating stability during a time of financial hardship and a public health pandemic. 

For more information on the U.S. Census Bureau’s Household Pulse Survey, visit the website:  https://www.census.gov/data/experimental-data-products/household-pulse-survey.html