Bringing mortgage industry stakeholders, consumer advocates, and researchers together to develop collaborative solutions to ensure sustainable homeownership, system stability, and equity in response to the COVID-19 crisis.

Developing Solutions through Partnerships in the Housing Finance Industry in an Uncertain Time

In early March 2020, a novel virus brought the world to a halt. As the United States entered a lockdown, businesses boarded up, employees stayed home from work, and unemployment spiked to record highs, prompting major concern as to how millions of suddenly unemployed individuals would be able to remain in their homes. In the weeks following the initial shutdown, the Housing Finance Policy Center (HFPC) launched the Mortgage Markets COVID-19 Collaborative (MMCC), bringing together leaders (See Collaborators) from across the housing industry to build equitable solutions for an uncertain time.

There was much at stake. If we were to avoid the kind of home loss, especially among households and communities of color witnessed during the foreclosure crisis, rapid, collective and evidence-based responses were essential. The insights provided by the MMCC allowed HFPC to rapidly inform the developing situation. Data-driven projections provided early estimates of the number of households at risk of falling behind on their housing payments and the dollar cost of protecting both renters and owners. Lessons learned from 2008 offered guidance for initial federal intervention. And as mortgage payments slowed, shared expertise from mortgage servicers and lenders laid the groundwork for a liquidity vehicle necessary to avert a potential meltdown.  

Evidence on the financial position of renters painted a bleak image of vulnerability, leading to prescient calls for policy that went beyond eviction moratoria and considered the long-term financial health of renters. And in the confusion following the passage of the CARES Act, careful reading of the legislation helped parse out how mortgage channels dictated which protections households received as either renters or homeowners.

The pandemic also exposed and compounded long-standing housing disparities between white households and households of color. Black and Hispanic households were already more vulnerable to economic risk entering 2020, and, during the pandemic, the impacts of systemic racism made Black and Hispanic households more likely to experience unemployment and less likely to be able to make rent and mortgage payments. Landlords of color, who tend to own smaller, more affordable units, were also disproportionately impacted by missed payments, and federal protections often failed to reach them.  

As the next stage of the pandemic ushers in a new slate of challenges and policy interventions, there will remain a need for informative, evidence driven research. COVID Forbearance plans are starting to end, amplifying the role of loss mitigation tools in avoiding a foreclosure crisis. In many states, emergency rental assistance is becoming the last line of defense against an eviction crisis as other protections and moratoria sunset. And as $10 billion in federal assistance for struggling homeowners starts to flow through states, data will be critical to execute efficient and equitable distribution efforts. Informed by the MMCC, HFPC will continue to produce thoughtful and timely analysis that promotes a safe and equitable housing market in the time of COVID. 

Building on a Successful Collaboration Model

The MMCC capitalized on the learnings of prior collaboratives to develop a successful model for collaboration. From several years of convening, the following points have stood out as best practices:

• Include representatives from diverse perspectives including bank and nonbank servicers and lenders, independent mortgage bankers, mortgage insurers, consumer advocates, housing counselors, major industry trades, state housing finance agencies, scholars, researchers and civil rights organizations.
• Meet regularly to share information, build knowledge, including a shared repository platform where research, proposals, and perspectives can be made publicly available.
• Build a shared understanding of the data and the issues—while not necessarily seeking consensus—and identify standards that are supportive of both industry and consumer needs. 
• Share data needs and produce data and analysis to support decision making by, and connectivity among, participants. 
   

The Participants and the Work Ahead

We convened a proven community of researchers, advocates, industry representatives and government leaders who are thinking about the next steps for response, recovery and reform. They look to facts and analysis to understand the potential impacts of proposed solutions and to inform decision making that will lead to sound and efficient markets and more broadly shared economic prosperity. The MMCC seeks to be a critical resource for those leaders trying to implement effective solutions based on evidence and a holistic understanding of the market and the people it can serve.

The MMCC community has informed more effective response, recovery and reform efforts around a number of issue areas, including:

• Preventing and mitigating mass foreclosures and wealth loss;
• Providing rental relief and assistance to tenants and landlords to stave off evictions;
• Safely guiding homeowners out of forbearance; 
• Distributing federal relief funds in an equitable and efficient manner;
• Safely and equitably expanding access to credit. 

We also help address the broader questions overarching these issues: How do we put new policy in place or rebuild systems and structures to prevent disparate outcomes? How can we be more race-conscious in our policymaking? How do we think about the barriers people of color experience in all our systems and structures? What evidence can help advance equitable race-conscious policymaking? 

Only through aligned, coordinated and intentional engagement by mortgage industry, nonprofit, and consumer groups can we develop and implement thoughtful, evidence-based, and effective policies and practices that will mutually benefit consumers and the mortgage industry. 

Thank you to our funders, without which this work would not be possible: 

2020 MMCC: 

• Bank of America

2021 MMCC:

• Rocket Mortgage (formerly Quicken Loans)
• Mr. Cooper