Down payment assistance part of $3.5T infrastructure plan

As borrowers impacted by COVID-19 continue to exit mortgage forbearance, now is the time for lenders and servicers to be proactive in their borrower outreach to reduce foreclosure volume. According to ATTOM Data Solutions, foreclosures have increased by 9% in the first quarter of 2021. And while foreclosure is sometimes unavoidable, lenders and servicers have an arsenal of tools at their disposal to help borrowers before that happens.

Less than two months after a missed mortgage payment, servicers typically contact borrowers to discuss potential options. However, it can be challenging to connect with borrowers. Computershare Loan Services (CLS) is one of the highest-rated servicers in the US. With deep roots in default servicing, Specialized Loan Servicing (SLS), part of the Computershare Group, helps clients mitigate a rise in foreclosures with contact strategies that meet borrowers where they are.

“Even before the pandemic, we were looking at ways to expand our communication,” said Leesa Logan, General Counsel of Specialized Loan Servicing. “Times are changing. Consumers don’t always answer the phone or look at their email. The old way of sending out letters isn’t always as effective as it once was.”

The CFPB’s Proposed Rule Amendments 

The pandemic heightened the need for lenders and servicers to improve communication quickly. But even with the best efforts, it can be challenging to effectively manage consumer contact – especially when onboarding high origination volumes and navigating new rules and regulations. 

Senate Democrats this week unveiled a $3.5 trillion social infrastructure framework which would include down payment assistance, but little else to address challenges low-income and minority borrowers face in the housing market.

The framework would set aside $332 billion for affordable housing. Senate Democrats hope to pass the legislation through an abbreviated budgetary process known as reconciliation, in tandem with the $1.2 trillion bipartisan infrastructure package, which passed the Senate on Tuesday. Biden has said he will only sign the bipartisan effort if the $3.5 trillion package, which includes much of his agenda, also passes.

But so far, the proposal contains few ambitious new programs to tackle problems in the housing market. Besides down payment assistance, there’s no proposal to close the racial homeownership gap. Nothing in the proposal would salvage the country’s aging housing stock, or train a fleet of buildings tradespeople to retrofit inefficient homes. There’s no program make low-dollar mortgages make sense for those who finance them, and no funding to create a homeownership voucher.

Most programs in the $3.5 trillion framework are geared toward renters, not homeowners. The biggest exception is down payment assistance, which President Joe Biden campaigned on, and which housing affordability proponents have argued would help more access homeownership.



The Senate’s version is light on details, but a legislative proposal already exists in the House of Representatives. In July, California Congresswoman Maxine Waters, who chairs the House Financial Services Committee, proposed a $100 billion down payment assistance bill to provide up to $25,000 to first-time homebuyers.