You Deal With It

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cover story The executives at both Wingspan Portfolio Advisors and Carrington Mortgage Services thought this aspect of the CFPB's course had been downplayed in the media. "It seems like there hasn't been much consideration put into how these new standards might reshape the servicing industry in terms of the various players," Alkire said. "For example, the combination of Dodd-Frank, Basel III, and the foreclosure settlements are effectively pushing many commercial banks out of non-agency real estate lending. Is this really what Congress intended? Dodd-Frank is also creating significant obstacles to non-agency mortgage securitizations." Covering a large volume of very specific lending and servicing rules will require mortgage companies to be "virtual experts in multiple narrowly defined areas." Not surprisingly, that could drive traditional servicers to outsource various aspects of their business. Adding another party to an already complex system of checks and balances within housing finance could come with complications. "Traditional servicers electing to outsource parts of their business will need to build in appropriate controls for their vendors, auditing their processes to ensure compliance with all of the current guidelines," Alkire added. "This means that they will need to be flexible enough to cut ties with any vendor that fails to meet requirements without disrupting service to borrowers." Shiller returned to the bottom-line issue: increased costs. A massive new rulebook for lenders and servicers will mean additional expense in creating and servicing mortgage loans in a way that meets the new, stringent requirements.  "Ultimately, the costs will be passed on to the consumer, whether for changes to the origination platform or from costs servicing will bear," Shiller said, who expects further clarifications of the new rules to be issued by the second quarter of 2014. However, those costs are miniscule compared to the vast upheaval experienced five years ago. The mortgage industry continues to take its medicine, and on the other side, the consumers will have a more confident, transparent experience financing their homes. The process was never cut out to be easy considering, as Cordray put it at October's MBA convention, that the mortgage sector is the "single biggest consumer financial market in our nation and also in the history of the world . . . topping $10 trillion." "Just as importantly," Shiller concluded, "investors will gain sufficient confidence to return to the mortgage sector to provide sustainable lending capital to support the mortgage industry, which is such an important part of the American economy." NEWHUDHOARULES TOOKEFFECTJAN.2013 ISYOUREXISTINGCOMPLIANCE SOLUTIONWORKINGANDEFFICIENT? » HUDrequiresallHOAliensberemovedbeforetheservicer conveys title, effectively leaving the servicer to either negotiateremovaloffeesorpaythem. Can you quickly and easily determine if a property is in an HOA, and find the current HOA contact information, and negotiate with the HOA? » ServicersmustremoveHOAliensandpayanyoutstanding HOAfeespriortoconveyance. HOA outreach and negotiations can be very time consuming and have a tremendous impact on a servicer's resources and revenue model. SperlongaidentifiesallHOAs,collectspayoffdocumentationand negotiatesHOAfeesonbehalfoftheservicer.Allofourworkis warrantedtoaddanadditionallayerofprotectionfortheservicer. CALLSPERLONGATODAY! 888.214.7314 The M Report The M | 19

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