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FEATURE Or ig i nat ion SERVICING Services' Servicing Solutions and Technology division. Se r v ic i ng The servicer/borrower relationship is about to get more formal: "Loss mitigation previously was a pretty informal process where borrowers wanting to stay in their homes but having some financial difficulties would call, and their lenders would try to work something out," Naimon said. Now, "You're taking an application, you're verifying information, you're giving adverse action notices—it's been turned into a mini-origination now." s e c on da r y m a r k e t a na ly t ic s Small servicer ranks could thin: "There's a lot of stuff that does apply to small servicers. When you include all the stuff that does apply . . . many of the small servicers will just not make the investment to do the things that they have to do. I think you might see an exit of the small servicers," Naimon commented. Servicers and borrowers will both feel some strain: "There's lots of implications because [servicers] might need to adjust internal timelines, [or] they might need to adjust forms to become more standardized by the CFPB," Monserrate said. Meanwhile, borrowers can look forward to "more documentation required up front. That might become more onerous on the borrower to consolidate and put together." There's a whole host of regulatory changes," FitzGerald said. "The question that I would be asking a service bureau is what staff do you have dedicated and what processes do you have in place to help us keep up with those regulatory changes?" Solving the Regulatory Riddle Servicers will need to look for firms that have familiarity with the rules and a solid grasp of the history behind them: Implementation could be time-consuming for vendors and costly for servicers: prepared to adopt the technologies required to meet the new standards. For consumers, "They're going to have more information. The only challenge they'll face is really understanding that information," he said. With heightened scrutiny from regulators and the media, borrower focus will remain a priority: Next year will see a continued focus "on protecting the borrower and doing right by the borrower. I think that's going to continue. I don't think that's going to go away," Monserrate said. "No one has really fully implemented these regulations yet because they don't exist and they haven't been applied yet. I think "The servicers are going to be having a practical or pragmatic spending millions and millions understanding of servicing . . . Behavior will be better Receive a free subscription to MReport! of dollars on implementation overall: and understanding the history of teams . . . trying to get the pieces how we got here is important. Brian Nettleingham, shareReceive a requirefree subscription to MReport! aligned around the new Having that understanding will holder and member of Maddin ments," Naimon predicted. "If Hauser's mortgage litigation and you'reFor more information onbetter help a subscription, contact Jason Myers at 214.525.6700 or a servicer, you may not be your free servicer apply these changes going forward. I think compliance group, said the inable to do that much until some of Jason.Myers@TheFiveStar.com.that free subscription, dustry will not soon forget "the having your vendorsFor more information on yourhistory is important," contact Jason Myers at 214.525.6700 or finish their work." Frenkel said. cost of regulatory actions that Jason.Myers@TheFiveStar.com. have ensued over the last several Successful service years" and will continue to operbureaus will show an ability to keep up: ate in that mindset. The Crystal Ball "Are staff dedicated to keeping The industry will be about up with regulations? It's not just There are challenges as strong as it ever was: ahead for both servicers the CFPB changes—everything and borrowers: "Will the industry come out that's happened, from bankstronger? No," Naimon said. According to FitzGerald: "I ruptcy reform to HAMP to "The industry always changes. think the difficulty is going to servicing alignment initiatives It's another change." be in making sure [servicers] are between Fannie and Freddie. news and strategies for the evolving mortgage market news and strategies for the evolving mortgage market themreport.com january 2013 themreport.com On Your Side: Mortgage On Your Side: Mortgage Banking News, Done Better Banking News, Done Better january 2013 theMReport.com theMReport.com Originations | Servicing | Analytics | Secondary Market Originations | Servicing | Analytics | Secondary Market As the industry becomes A bAttleground in cApitol hill's turf wAr, As the industry becomes A pressure, And persistent how will pArtisAn politics, presidentiAlbAttleground in cApitol hill's turf wAr, how will pArtisAn politics, mArket in 2013? policy struggles influence the presidentiAl pressure, And persistent policy struggles influence the mArket in 2013? 37 origination Policy and Prophesies: Will More Regulation Boost Profits? new data demonstrates that industry standardization could lead to healthier revenue growth. 54 | The M Report 37 47 servicing origination Blueprinting Appraisal Reform. Why marshaling Policy and Prophesies: Will More the right allies, approach, Regulation Boost Profits? and strategic accountability measures are crucial new data demonstrates that industry standardization could lead catalysts to establishing effective to healthier revenuehousing policy. growth. 47 57 analytics servicing The Real Deal: Lending's Long-Term Outlook. Will the Blueprinting Appraisal Reform. mortgage and housing industries stay on track for Why marshaling the right recovery, and allies, approach, and strategic how is the accountability measures are crucial marketplace preparing for what's catalysts to establishing effective now and what's next? housing policy. 57 71 secondary analytics market The Real Deal: Lending's Long-Term The Wealth Effect. Forecasts Outlook. Will the mortgage and the Fed's recent resulting from housing industries stay on track for report hinge on Flow of Funds recovery, and how is the perception becoming reality marketplace preparing for what's consumers. for today's now and what's next? 71 secondary market The Wealth Effect. Forecasts resulting from the Fed's recent Flow of Funds report hinge on perception becoming reality for today's consumers. Experts you trust. People you know. News you want. MReport brings today's housing finance headlines Experts know mortgage banking, News you want. MReport is why you can count finance headlines into focus. Youyou trust. People you know.and we know you, which brings today's housing on MReport into focus. You know mortgage banking, and we know you, which is why you can count on MReport to provide insight into the latest industry innovations. Committed to giving originators, servicers, and to provide insight into the latest industry innovations. Committed to giving originators, servicers, and all lending professionals access to smarter perspectives, MReport believes it's time to think differently all lending professionals access to smarter perspectives, MReport believes it's time to think differently about the mortgage marketplace. Because the American Dream is evolving . . . are you? about the mortgage marketplace. Because the American Dream is evolving . . . are you? Subscribe now! Subscribe now! CallCall 800.856.8060 connect with usus 800.856.8060 or or connect with online at TheMReport.com. online at TheMReport.com.