The CARES Act was enacted to address the economic fallout due to the Covid-19 pandemic. With this new law, mortgage loan servicers have now been given guidance on how to handle forbearance requests from financially burdened borrowers.
However, the guidance is ambiguous in providing the options that a servicer can offer to the borrower at the termination of the granted forbearance. This ambiguity, and the potential for disparate treatment of borrowers in the stages of loan modification, delinquency, workout or foreclosure puts servicers at risk at a time when regulators will be extremely vigilant regarding the actions of servicers.