Color of Money

immediately made restitution to our impacted customers and invested in process improvements to prevent reoccurrence.”

Regulators are particularly concerned about the actions of loan servicers, because borrowers have no choice in who services their loans. Companies that service loans are responsible for collecting

mortgage payments and working with borrowers when they can’t pay.

Millions of people have lost their jobs because of the coronavirus pandemic, and this has left many homeowners struggling to keep up with their mortgage payments. Under the Coronavirus Aid, Relief, and Economic Security (Cares) Act passed in March, homeowners were allowed to ask for an initial forbearance of up to 180 days on their payments. If additional relief was needed, they were entitled to a 180-day extension. Interest

still accrues, but fees and penalties are waived.

Initially, many borrowers panicked when some servicers said they would have no other option but to make huge lump sum payments at the end of the forbearance.

In early June, almost 4.3 million homeowners were in forbearance plans, according to the Mortgage Bankers Association (MBA). In the MBA’s most recent report, released this week, an estimated 2.8 million homeowners were in forbearance plans. But this number could increase

because of the resurgence of the novel coronavirus, which could cause state and local jurisdictions to respond by closing more businesses.

Borrowers who are in financial trouble or find themselves unable to pay their mortgages will need the help of mortgage servicers to find the right repayment options as they come out of forbearance, Hagan said.

“During this pandemic, in particular, the home has become our office, our school, and a place where we can feel safe,” Illinois

Attorney General Kwame Raoul said. “And that’s why it’s important that we continue ensuring that mortgage servicers are fulfilling their obligations to borrowers.”

People are going to need assistance as COVID-related financial struggles continue into next year. The Nationstar settlement should be seen by other companies as a shot across the bow that they should be diligent and correct in their servicing of mortgage loans.

Readers can write to Michelle Singletary c/o

The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle. singletary@washpost. com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook. com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.