At the end of a forbearance period, servicers are faced with a difficult question. You need to determine if borrowers are going to reinstate their payments, if they won’t be able to make payments and need to extend their forbearance period, or if they need to modify their payment plan. Finding the answer is a time-intensive and manual process based on incomplete information.

With a healthier pool of borrowers, servicers can answer this question more accurately and efficiently. The more you can help your borrowers improve their financial health – even during a forbearance period – the lower your servicing costs and the lower your risk.

Strategies for a soft landing

EarnUp works with servicers to get borrowers onboarded onto a payment application that improves their financial health. The platform enables servicers to communicate with borrowers to help them understand their payment options and keep track of their status. With EarnUp, you can also easily set up a branded, self-serve portal that allows customers to update and change their payment schedule at any time, from anywhere.

You can offer a number of effective strategies to help borrowers exit forbearance gracefully with a soft landing, including:

  • Making automatic payments via the EarnUp app.
  • Adjusting timing of mortgage payments to align with paychecks, when they’re guaranteed to have funds available.
  • Reserving a portion of each paycheck to apply to mortgage payments.

Using these strategies, EarnUp has a proven history helping consumers improve their financial health and repay their loans. Launched in 2013, we manage more than $10 billion of loan repayments on the EarnUp platform.

EarnUp customers represent all levels of the economy and are facing the same challenges as many Americans. Many have lost income due to the pandemic. Others have insufficient savings set aside for a rainy day. A significant number have requested forbearance for mortgage payments.

Despite these challenges, EarnUp customers have the tools and information they need to navigate the downturn and stay in their homes.

Nearly 80% of consumers using EarnUp improve their overall financial health

The majority of EarnUp customers in forbearance go right back to paying their mortgages at the end of their relief periods. In a September 2020 survey of EarnUp customers who have experienced forbearance, 60% said they’re either making payments again or plan to resume making payments when their forbearance is complete.

After working with EarnUp, 25% of consumers are more likely to see their credit score improve from poor to fair. EarnUp customers with annual incomes below $60k see a 50% credit score improvement over a two-year period.

Accurate data for proactive support

Via EarnUp’s GetAhead Dashboard, servicers access up-to-date data to evaluate the financial health of borrowers so you can focus your efforts to help consumers that need the most support. When you have accurate information on consumers’ financial health, you can take proactive action to address three types of scenarios:

  • Non-performing loans already in forbearance. Servicers can help homeowners exit forbearance by offering a range of workout solutions.
  • Potentially non-performing loans. Servicers can prevent homeowners from defaulting on loans by offering proactive solutions such as forbearance.
  • Performing loans. For homeowners that are making payments, servicers can increase satisfaction in a competitive market with little brand loyalty. By offering customers innovative, flexible payment options, you can increase the retention/recapture rate for low-risk customers.

We’re here to help our servicer partners ensure more consumers successfully repay their loans and stay in their homes. As a result, you’ll be better positioned to take on more loans and grow your business.

To learn more about how EarnUp can help servicers and get a personalized demo of our solution, please get in touch.