Mortgage Relief & Servicing 101: What Borrowers Need to Know in Uncertain Times

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Why Continuing Mortgage Payments Is More Important Than Ever

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If you're facing financial uncertainty, it’s tempting to pause your mortgage payments. But don’t stop making payments until you’ve received official, documented relief from your loan servicer.
Failing to do so could:

• Severely damage your credit score
• Disqualify you from refinancing at lower rates
• Lead to missed opportunities during historically low interest rate periods

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Understanding the Mortgage Lifecycle: From Broker to Servicer

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At Orion Lending, we believe in educating our clients and brokers so they can better support borrowers. Here’s a quick overview of how a typical mortgage works:

1. A borrower connects with a mortgage broker to start the loan process.
2. The loan is processed, underwritten, and closed.
3. After closing, the loan is transferred to a loan servicer—not necessarily Orion Lending.

Did You Know?
The servicer collects payments but does not own the loan. They manage it on behalf of the investor.

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Who Actually Owns the Loan?

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After closing, most loans are sold to large institutions like:

• Fannie Mae (FNMA)
• Freddie Mac (FHLMC)
• Ginnie Mae (GNMA)

These loans are bundled into mortgage-backed securities (MBS) and sold as investments, which may show up in your 401(k), insurance plans, or mutual funds.

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Low Interest Rates & The Rush to Refinance

When rates drop—as we saw dramatically in 2020—it creates a huge incentive to refinance. But here’s the catch:

• Servicers expect a minimum 3-year breakeven period
• Early loan payoffs hurt servicer revenue (called servicing runoff)

So when thousands refinance early, servicers experience significant financial strain.

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COVID-19 & Forbearance: A Perfect Storm

The pandemic introduced a new level of complexity for servicers:

• Job losses caused borrowers to miss payments
• The government offered forbearance programs to provide relief
• Yet servicers must still pay investors, even if the borrower doesn’t pay

This creates a cash flow crisis for servicers and affects the entire lending ecosystem.

Tip: Always speak to your Orion Account Executive before advising clients on payment relief options.

How Orion Lending Supports You—Now More Than Ever

Orion has weathered market turbulence for years—but nothing quite like this. Still, our mission remains the same:

• Offer great rates and service
• Educate brokers and borrowers alike
• Provide smart lending solutions during uncertain times

We’re proud to stand beside our broker partners, helping clients navigate their mortgage journey with confidence.

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Key Takeaways

• Don’t stop mortgage payments unless your servicer provides official relief
• Understand the roles of brokers, servicers, and investors
• Know how refinancing and forbearance impact the lending system
• Trust Orion Lending to guide you and your clients through it all