Leading experts weigh in on current policy issues and challenges

Exploring Access to Credit: Are Mortgage Servicing Costs, Complexities, and Risks Impeding Lending?

The US mortgage servicing industry manages $10.3 trillion in mortgage principal, collecting payments from borrowers; paying investors, insurers, and tax authorities; helping borrowers who default on their loans work through loss mitigation options; and managing foreclosed properties.

In recent years, the mortgage servicing costs have skyrocketed, partly because Congress and regulatory agencies have increased regulatory requirements in response to the foreclosure crisis. While the additional regulations have improved the quality of servicing, they are complex and costly. Multiple pressures placed upon servicers have suppressed lending, which has made it harder for borrowers with less-than-perfect credit to obtain a mortgage.

This debate brings together a small representative group of Mortgage Servicing Collaborative members to discuss how regulatory burdens may have affected servicing costs and reduced access to mortgages—and what can be done to change this situation.

The Urban Institute is talking with...
David Battany David Battany
Meg Burns Meg Burns
Pete Carroll Pete Carroll
Lisa Rice Lisa Rice
Ted Tozer Ted Tozer
Alanna McCargo
Moderated by:
Alanna McCargo
Codirector, Housing Finance Policy Center
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During our Mortgage Servicing Collaborative kickoff meeting, participants discussed how new regulatory burdens had contributed to the increased cost of servicing mortgages. In addition, in June, the US Treasury released its first report to the president examining the US financial regulatory system and outlining executive actions and regulatory changes that can be immediately undertaken to provide relief in areas including mortgage servicing. Do you believe there are ways to reduce the costs of regulation in servicing without increasing risks to consumers and the housing market? If so, what are your suggestions for doing so?

Absolutely.  First and foremost, the multitude of distinct federal, state, and agency policies should be harmonized and unified into a single set of practical standards and requirements.  Consumers do not derive any benefit whatsoever from the complex and inconsistent rules that were imposed over the course of the crisis.  Ironically, the various regulators who issued new policies all had the same goals in mind - to improve servicing practices and enhance the customer experience.  Yet, the amount of time it takes to resolve delinquent loans and help distressed borrowers has actually lengthened as a result of the regulations – which not only increases costs, but harms the very people who are desperately in need of assistance. 

It might be a dangerous proposition to accept, at face value, the Treasury Report's (Report) implication that increased regulation in the servicing space is overly burdensome and that fewer regulations will decrease the cost of servicing.  The Report takes a myopic approach to assessing the economic benefit of more comprehensive rules in the aftermath of the financial and foreclosure crises.  Any analysis of the price of increased regulation must include an evaluation of what the crises cost American consumers – well over $10 trillion to say nothing of the emotional, physical, and mental anguish people suffered.  Too many communities are still reeling from the crises.  For example, 20% of homes in majority African American neighborhoods are still underwater.

                       

While acknowledging that lax regulation and oversight were catalysts for the crises, the Report does not take a comprehensive look at the increased benefits that new regulations have brought.  There can be no doubt that sound regulation, like the CFPB’s Servicing Rule, has made significant, positive impact on the lives of families and has contributed to avoiding foreclosures.  Given the high cost of foreclosures to homeowners, neighborhoods, and investors, it makes sense to employ rules that help preserve sound homeownership and make our markets safe.  It also makes sense to analyze the efficacy of those rules and regulations by weighing the costs of not having them.

The CFPB announced their Servicing Rule in August of 2016, to be effective April of 2018.   Recently the CFPB announced that they will be making "substantiative  changes" to the rule, to be announced early this fall.      

This highlights a common disconnect between servicers and regulators.    There is a very complex network of computer programs, systems, and written policies and procedures involved in all aspects of mortgage lending, from the first day of talking to a borrower until the loan is closed and the servicing begins.    Many of these systems have complex interfaces with one another, some systems are owned or built by the servicer, and some are managed by third party firms.    The various systems were built by different manufacturers, over many years, often with different programming language. 

Even a very simple, single rule change could impact multiple systems, and require intensive planning, rewriting of multiple different codes in different formats with different platform owners, and robust testing.   Ironically, much of the system complexity is driven by various state and federal regulatory requirements, as well as individual investor requirements, which all have been layered on over many years.

Sometimes when servicers describe the amount of time required to manage the programming of new rules, it maybe perceived by regulators as an effort to not be supportive of a new regulation.    A fall 2017 update to an April 2018 implementation date may seem like ample time to a regulator, but would be viewed as an very short time window by those who have to mange the programming.    This is not an example of either party acting in bad faith, but an example of the complexity of the systems behind mortgage lending and servicing, not be widely understood by external parties.

 

Consumer protection regulations should be powerful, clear and simple.      When regulations are unnecessarily complex, or intentionally vague, this needlessly creates uncertainty and bureaucracy, which leads to higher costs, all of which are passed onto the consumer, and reduces access to credit, particularly for higher risk, and harder to serve, borrowers. 

 

The average national cost to originate a loan today is approximately $8,900 according to MBA lender data.     This is almost double the cost a few years ago.      When a consumer sits down at their closing table, they are presented with their final loan file, which may easily contain 100+ pages of paper.    Did all the expensive work that happened behind the scenes to produce the file really bring $8,900 of value to the consumer?   How many pieces of paper in the  file actually have a value to the consumer or will even be read by the consumer?   How much work and cost that went into the file was only to ensure the lender complied with a multitude of federal, state and local regulations, many of which are confusing and contradictory, and some of which may provide little, if any value to the borrower?

 

The  full amount of the $8,900 closing cost is charged directly to  the borrower, either by cash they have to bring to the closing table, or a higher interest rate charged every month for the life of the loan, in an amount where the present value of the higher interest rate equals $8,900.   

 

Underlying most regulations were very good intentions.    Most people would agree that the ability-to-repay and many servicing regulations created post crisis solved real issues and provide important consumer protections.  The issue lies in the unintended consequences of the people who in good faith wrote the details of the implementation of these regulations without having a full understanding of the complex business processes they were attempting to regulate. 

 

Unfortunately some regulations were deliberately written to be complex and vague, in a naive view that this would give regulators more leverage over lenders.   The result was that lenders abandoned certain market segments, or this raised their costs to do business in the segments in which they continued to operate.

 

If we can improve regulations to preserve their original noble intent, and eliminate costly, unnecessary aspects, that provide little or no value to a consumer, then we will lower the cost of credit and improve access to credit for all consumers.

 

I completely agree with both Lisa and David that regulations can be extremely beneficial for a marketplace, providing uniform standards for businesses and consumers alike, which can enhance the efficiency of product delivery and improve customer experience and satisfaction.  The very best policy-makers design regulations and program rules that take into consideration existing operational practices of the companies they are intended to regulate as well as the impact on consumers.  Unfortunately, in the rush to address the impending housing bust and in the early years of the downturn, lawmakers and regulators developed numerous new programs and policies that were not well-conceived and, that, as David points out, did not fulfill their original intent.  Too many policies were overly-complicated or too vague or conflicted with existing policies.  

I recently read a great paper from the Philadelphia Fed, https://www.philadelphiafed.org/-/media/research-and-data/publications/w..., that showed how foreclosure delays rarely result in a benefit to the consumer; the servicing rules that have extended the time it takes to help a borrower secure a loan modification have not resulted in more modifications.  Instead, the additional time adds costs, frustrates consumers, and ultimately, can hurt neighborhoods if a protracted foreclosure results in a vacant home stagnating in a community for years. 

Fortunately, we now have a perfect opportunity to reflect on all of the various programs and policies that have been put in place over the last eight years and revise and refine, based on the lessons learned.  We can streamline and harmonize and remove complexity in favor of a set of uniform, straightforward rules.  We can already see positive movement from organizations like the FHFA and GSEs, with FlexMod.  FlexMod embraces the key learnings from the crisis – offering a borrower a modification as early in the delinquency as possible, requiring fewer documents to do so, and reducing the payment by at least 20 percent produces the best results.  More work can be done along these lines, particularly by other agencies, like the FHA.  

Thanks for the responses so far! It seems like there are fundamental ideas that have come through in your comments that we can all agree on when it comes to the current regulatory environment, and there is an opportunity now to streamline and simplify the rules while maintaining important consumer protections. But it needs to be done with coordination and standardization, and with an eye toward ensuring the right outcomes so that consumers don't end up at risk or unprotected from systemic risks they have no control over.  This will take cooperation from a number of regulatory and policymaking bodies that oversee or influence servicing activities, including the FHFA, the GSEs, HUD/FHA, CFPB, Treasury and others. We also have to think about the States and the judicial foreclosure and state laws that are a huge part of the legal process, and what reforms are needed there to ensure that the bottlenecks and delays in the foreclosure process are eliminated.

Lisa made a good point that we must keep in mind: the lack of regulation and consumer protections and controls in the period prior to the mortgage meltdown of 2008 and during the default crisis, created painful consequences in the form of people losing their homes and wealth to foreclosure--with a disproportionate impact on blacks and Hispanics. In addition, bank shut downs decimated communities, and the disappearance of private mortgage investors and their capital sent our entire economy into a tailspin. 

Both David and Meg touched on the tools available that can help in the future, like simplified and standard foreclosure prevention programs such as the Flex Modification at Fannie Mae and Freddie Mac. What other tools might be helpful for consumers and communities still facing foreclosure or negative equity situations? And, do you think that the current loss mitigation tools for government insured mortgage loans -- FHA, VA or USDA loans -- are sufficient?

Alanna, you asked if loss mitigation tools for government insured loans are sufficient?  They probably are not when compared to the role the GSE have played.  Not because the government insuring agencies do not have well thought out loss mitigation policies.   The difference is FHA, VA, and USDA are  government owned mortgage insurance companies  not MBS issuers like the GSE.  In the Ginnie Mae program the issuer is also the servicer.  The challenge we face is how do we synch up the two programs.  Do mortgage insurance companies and the government insuring agencies take on a more active financial role in the loss mitigation process like the GSE or do issuers in the Ginnie Mae program take on more of an active financial role like the GSE have done in the conventional loan space.

 

"You'll see it when you believe it."

Read that again. That is not cynicism, but optimism. It is also one of Quicken Loans' ISMs--things we live by--and a testament to the power of vision, determination, and perseverance. As a servicing industry, too often we have lacked the vision to chart our own course, so many others have charted it for us. Urban's Mortgage Servicing Collaborative is an effort to change that paradigm, and an opportunity to show that the industry can effectuate positive change that puts our clients first while improving the industry. 

We believe that the future of our industry and every American homeowner would be improved by simplifying and aligning the rules for default servicing.  This is not only possible, but steps have already been taken in this direction. Last year the MBA's Future of Loss Mitigation Task Force worked with a wide variety of stakeholders to propose One Mod, a new loss mitigation product that was based on the idea that if we simplified the application process and sought to drive payment reduction for the homeowner, we could help more of our clients and lower re-defaults.  As the industry was coalescing around these ideas, FHFA drove a process of truly open and collaborative engagement between servicers, the agencies, and consumer advocates. These efforts culminated in Fannie and Freddie releasing Flex Mod, a product that shared many of the characteristics advocated by the industry, but with additional key features that served to either limit taxpayer risk to Fannie and Freddie or address concerns raised by consumer advocates. 

The model of engagement driven by FHFA and the GSEs can and should be a model for further policy alignment. We truly believe that we could help thousands of families that otherwise may end up in foreclosure if FHA and VA would consider aligning their loss mitigation policies with Flex Mod, and would welcome an engagement process designed to allow such a result. Further, we believe that this engagement model could drive change across the industry to create a win-win-win for homeowners, servicers, and the policy makers. 

It is this unwavering belief that there is a better way that prompts us to ask all industry stakeholders to support the concept of "One Guide", the simple idea that if there was one set of rules across all of default servicing, it would benefit every party in the value chain. We are not so naive as to think it is easy-but few things worth doing ever are. It is, however, possible. The extraordinary success of Flex Mod shows that consensus can be achieved, and we need to think even more broadly to try to drive consensus across all of default servicing. 

For the first time since the crisis, last year the industry took a critical first step towards driving to consensus around Flex Mod. There is still much more work to be done and we owe it to our clients and our industry to try to keep going. It is our sincere hope that the work of Urban's MSC will show us where the next win can come from, then the next, and so on. Further, if all of the parties engage the way that FHFA, the GSEs, and advocates did around Flex Mod, we have a real chance at success. We believe it, and know that if we all work together, we will see a better servicing industry. 

 

Servicers need a  set of rules and expectations that are specific, standardized, and consistently enforced by regulators and investors.  A servicer should not be put in a position where they have to decide who's rules they will violate.  For example the CFPB has one foreclosure timeline  but an investor has a shorter timeline.  In my example the a servicer should have one foreclosure timeline to comply with that does not change based on the geographic location of the property, the servicer's regulator, or who owns the mortgage.

Servicing regulations need to be reevaluate based on the cost to the servicer and the value to the borrower.  The housing crisis was a hundred year event  The regulators  need to take into account that many of the causes of the housing crisis have been minimized by the tightening of underwriting guidelines.  Regulators made a good effort to correct the servicing problems of the crisis based on the economic environment at the time.   The  environment the current rules were written  was not normal.  Regulations need to use a more normal housing market to reevaluate the current rules.  The reason the reevaluation is so important is that we have to remember that for the housing finance system to work efficiently all stakeholders need to be treated equally.  Regulations need to balance borrowers, servicers, and investors interests equally.  One of the major factors limiting credit availability for higher risk borrowers is the belief by investors and servicers  the current regulations are weighted a little to heavily in the borrowers favor.  I want to acknowledge that the weighting of regulations in the borrowers favor is only one factor limiting credit availability.  Credit availability is also being limited by vague regulator and investor servicing rules plus the inconsistent enforcement of those rules .  I am not saying the current regulations are not well intended.  I am saying the regulators need to determine the abuse that they would like to minimize then work with all stakeholders to determine the most cost effective way to deal with the issue.  During this reevaluation regulators might find the infrequency of an abuse might not justify the added costs to the borrower.  The added cost might be in the form of limited credit availability not just a higher price for credit.

Regulators and investors need to develop a better working relationship with servicers.  During the crisis there were major problems created because of the lack of default management capacity.  Most servicers mean well. Regulators and investors should give the benefit of the doubt to servicers who has proven over time there commitment to  balance the interests of borrowers and investors.  

At the end of the day we have to remember the housing finance ecosystem is basically a zero sum game.  What ever economic burdens are put on mortgage investors and servicers those costs will be passed on to borrowers in higher credit costs or limited credit availability.

 

 

 

 

I love the comments from Pete and Ted, which are spot-on regarding the need for simplification and standardization of servicing policy – “Go, OneGuide!”   But, let’s get down to brass tacks here and respond to the original question from Alanna . . . 

We all know that one segment of the market that is most in need of updating and streamlining is FHA.  The FHA servicing policies are completely out-of-synch with the rest of the marketplace.  They are not only very difficult for servicers to execute, but also confusing and frustrating for consumers seeking assistance.  In the interests of full disclosure, I worked for FHA for almost two decades and I have a huge place in my heart for FHA and the agency’s critically important mission.  That said, I cannot pretend that FHA’s existing servicing and loss mitigation policies and practices are acceptable.

FHA, as a government-owned mortgage insurance company, must protect the insurance fund and FHA borrowers from unnecessary and unacceptable loss, of course.  BUT, FHA cannot defend policies that fail to satisfy these two objectives, which is the case today.  The FHA servicing regulations are out-of-date and must be modernized, in spite of the time- and resource-intensive nature of the regulatory process.  Regulations can (and sometimes, must) be waived to quickly implement upgrades, to keep pace with market change.  To me, FHA should consider waivers today, to institute immediate change, with a trailing set up regulatory proposals for public comment, to implement permanent upgrades. 

Further, there is no question that FHA can and should consider the types of programmatic changes we’ve seen in the GSE realm, and should do so through industry collaboration, a point that Pete highlights and applauds in his post today.  

The existing FHA modification rules require full-blown re-underwriting of the borrower, a borrower who qualified for the loan at the time of the origination, but who now has suffered a financial hardship that requires a reconfiguration of the monthly payment.  Why a complicated, time-consuming, document-intensive re-evaluation of a borrower in distress is beneficial, for either FHA or the consumer, is really the question here. 

Because the FHA modification parameters are far more complicated and restrictive than other modification products available, the terms result in:  a) more declinations; b) less payment reduction; c) more protracted decisioning to achieve resolution; and d) higher re-default rates for those borrowers who actually do obtain modifications.  From a governmental policy perspective, why would we accept these outcomes?  We shouldn’t.  And, now is the time to move away from the current policy positions. 

I’m anxious to hear the perspective of others on this topic!

Meg, I agree with you wholeheartedly that FHA needs to streamline and modernize their processes.  FHA needs to give Ginnie Mae issuers the flexibility to develop programs that work with borrowers to minimize losses the same way MI companies gave  flexibility to the GSE to develop the Flex Mod.  FHA needs to become an outcome based versus process based program.

Ted and Meg, great discussion on FHA servicing. You are bringing forward some of the ideas and issues we need to explore and validate in the Collaborative's work. Reflecting on what we've learned, and sharing across investor and insurer experiences is an opportunity to get it right for the future, and help standardize options and requirements for servicers. More certainty in servicing will also optimize the borrower experience.

I appreciate the call by Meg, Pete and Ted for making substantial improvements to FHA’s servicing and loan modification systems.  One way FHA servicing standards can be more streamlined is by allowing servicers to use the IRS guidelines for estimating expenses.  This would eliminate current FHA requirements that have led to burdensome and unnecessary information requests during the loss mitigation process.  Meg is right, the FHA’s document-intensive borrower assessment slows the process, confuses consumers and adds to costs. 

Default servicing has become quite expensive but this is not mainly the cause of increased regulations.  We need servicing compensation reforms that promote efficient and fair default servicing standards by aligning the incentives of servicers with those of homeowners and investors.  Post-default costs and REO-related expenses have increased dramatically as well largely due to poor quality control measures, ineffective maintenance standards, lax training and the use of third-party vendors who are often not closely located to the subject property. 

We can work to streamline the process using feedback from all stakeholders – investors, civil rights organizations, lenders, servicers, housing counseling agencies, regulators and consumer protection groups.  My colleagues in this debate have given several examples of efforts to improve servicing protocols and better align federal and state regulations and more work needs to be done.

But I want to register caution against laying all the blame for increased costs and market inefficiencies at the feet of increased regulations. We must be careful to not throw the baby out with the bath water. It makes sense to get a true handle on what is driving up servicing costs.  We don’t yet have that information.  Is it regulation that is driving up costs? Or are costs escalating due to operational redundancies, third-party payments, inefficient practices, policies and internal controls, obsolete systems, increased overhead costs, protectionist measures against investor lawsuits, outdated technology, or untrained servicing personnel?  

We also need to understand when it is that costs precipitously appreciate – is it when a mortgage becomes 30 days delinquent or is it at the 60 day delinquency mark? Better data and increased transparency will answer these questions and help us to realistically understand what contributes to increased costs in the servicing space and where we can focus our efforts to diminish expenses, streamline processes and improve performance. 

We can chew gum and walk at the same time.  Working together, we can make continued progress to streamline the servicing and loss mitigation process so consumers can receive needed relief quicker and we can save more homeowners from foreclosure.  We can ensure, as David pointed out, that regulations are strong, clear, and straightforward. But we must do this work with accurate information and while simultaneously addressing other factors that increase costs and make the system less efficient.

 

Fascinating discussion so far. Lisa, you are right to throw a caution flag down. Regulation related to servicing a mortgage is not the only driver of cost, and many of the new regulations serve an important purpose that should not be understated. The analysis to be done will help further break down the various cost drivers, and the evidence will inform policymakers, regulators and servicers as this conversation continues in the coming months.  There appears to be a big opportunity for streamlining, unifying and rationalizing the rules, and there is certainly more to do.

Moving into our final day of debate, let’s shift course and focus on ideas for bringing efficiency and new technology innovation into the servicing process.  Can innovation, automation and technology make a big impact in servicing? If so, what part of the process needs streamlining or more automation? David made the point about a disconnect he sees, where the investment and time it takes to update servicing systems and the expectations and incentives, do not align. The volume and pace of change required has grown over the years, and servicing institutions small and large are contorting themselves to stay current, or simply are not able to keep pace. What technology ideas would make communication and interactions with consumers more efficient? Is there more we could be doing with data and technology to bridge the origination and servicing process, and even extend that to servicing transfer efficiencies? Can we look to common data standards and rules-based platforms to help streamline and improve servicing?

Technology is definitely key to improving both customer experience and servicer efficiency, but upgrades in this arena will not be simple.  The process may need to begin with an industry-wide concerted effort to standardize servicing data.  Some work has been underway for several years, through MISMO, but it’s clearly difficult for an industry with substantial existing demand for staffing and systems resources to be able to dedicate as much attention to this work as we need.  Servicer resources have been stretched thin since the crisis began, frankly, given the constant regulatory and programmatic change, followed by the multitude of federal and state examinations.  All of this diverts resources away from the kind of thoughtful, long-term technology upgrades that would benefit the marketplace. 

That said, I am optimistic that the time is right for work to begin in this space.  For example, HOPENOW members have begun to discuss data standardization, in large part to address the challenges with servicing transfers that Alanna highlighted in her question.  

I agree with Meg that technology upgrades to servicing platforms are challenging because of limited resources.  I would think before a servicer would make a large  investment in technology  there needs to be servicing guidelines which are accepted by investors, regulators, and consumer advocates.  Servicer's management would want to be assured that  resources spent on technology  will not quickly become obsolete because of an investor or regulator changes  policy.  The change in policy might be an investor or regulator deciding they want a customized approach versus the industry standard.  To be able to leverage technology we first have to come up with a universally accepted servicing standards.

 

While the topic of our discussion shifted toward undisputed necessary technology updates and improvements, I’d like to bring us back to a few points raised in the earlier posts regarding loss mitigation and foreclosure delays.  Any movement forward must recognize the importance of states as laboratories of invention that have produced many innovations in foreclosure prevention.  State foreclosure laws, and in particular, state mediation programs, were not a primarily source of foreclosure delay.   The case can be made that many foreclosure delays were self-inflicted.  

 

New York is often referred to as a poster child for how cumbersome new state laws created unprecedented delays in foreclosures. Yet, the Administrator of the New York Courts published annual studies from 2012 to 2014 that showed a widespread pattern of servicers delaying both the filing of new cases and the completion of pending cases - the so-called Zombie Foreclosure problem.

 

The New York court system faced a serious problem in dealing with a “shadow inventory” created by servicer delays. At one point, legal servicers filed a class action lawsuit against the state’s largest foreclosure law firm to get them to stop the delays.  Ultimately, the New York court system had to devote substantial personnel and resources to identifying the “shadow foreclosure” docket cases and making the servicers’ attorneys prosecute them.  

 

Servicer conduct also caused delays in the mandatory settlement conferences set up by the New York courts.  Servicers repeatedly failed to meaningfully participate in the conferences.  As a result, conference sessions had to be continued multiple times, delaying meaningful loss mitigation reviews and substantially adding to costs. A 2013 survey of the New York foreclosure conferences revealed that 80% of the sessions had to be continued because servicers appeared without full authority or the necessary information to discuss loss mitigation.

 

My colleagues have rightly pointed out that the FHA loss mitigation process is in need of further alignment and I strongly concur. As we move forward with proposals to modify the process, we need to be mindful that FHA services loans for a discrete population of borrowers and more work needs to be done to ensure that there is not a differential effect on FHA homeowners with any servicing policy changes. Moreover, FHA has certain essential mechanisms that should be preserved, such as the partial claim, that have been crucial to homeownership preservation.  A closer look is needed to see what the effect of Flex Mod would be on the FHA book of business and homeowners. We must also look at all markets. There needs to be transparency and accountability in the PLS market as well.  It is not clear which servicers and investors will adopt the MBA’s “One Mod” proposal or the GSE’s Flex Mod for their private label and portfolio loans.  Transparent servicing guidelines for the private market facilitates efficiency, fairness and realistic assessments by consumer advocates regarding borrowers’ eligibility and foreclosure prevention options. 

 

Now, let me turn briefly to discuss technology advancements and the market's ability to incorporate new developments.  I believe that new technologies can help streamline the servicing and loss mitigation processes - and there are tools out there to help homeowners and servicers.  earnup  is a great new tool that allows borrowers to set aside money as they earn it and then makes the borrower's mortgage payment for them.  This is an excellent resource for the millions of people who work multiple jobs, are self-employed, and work in the shared economy space.  This simple piece of technology easily interacts with servicers' current systems for accepting mortgage payments.  

 

But other technology advancements aren't as easily adaptable and it can take years before they can be integrated into current systems.  Take the advancements in credit scoring mechanisms as an example.  We have new credit scoring tools, like VantageSccore 4.0, that are able to score millions of credit-invisible and thin-file consumers in the loan underwriting process. Yet the incorporation of this tool has largely been delayed by regulatory roadblocks and a concern over whether or not loan originators and secondary market players will be able to incorporate the new technology. 

 

Finally, as we look to bring on new technology to streamline processes, I would like to make an appeal to my industry colleagues to support businesses owned by people of color and women.  These companies are great innovators.  Yet these businesses often do not have existing connections and relationships that can be parlayed into business opportunities. Industry players must proactively work with Historically Black Colleges and Universities, Latino-Serving institutions of higher learning and professional associations like the National Black MBA Association and the Association of Hispanic Professionals to cultivate and support diversity within the lending sector.

 

We are going to wrap it up here.  This has been a fantastic conversation full of insights and much to chew on for our work in the Collaborative, and for the industry as a whole. After speaking to so many stakeholders, and personally working on servicing policy and operations for many years, I am truly encouraged about where we are right now and how well-aligned many stakeholders are in their thinking. As always, the devil is in the details on how we execute and advance these issues, but the need to ensure that there is a stable, reliable and sustainable way to efficiently manage and navigate the life of the mortgage once the homeowner is onboard is critical. 

There are not enough people outside of the industry who really know or care about mortgage servicing so helping create more understanding about this work, given its impact on tens of millions of mortgage holders in America, is key. There is a desire and understanding that transformative change will strengthen the industry, and more clarity about how important this fundamental part of the mortgage system is to the overall health of the housing finance system.  We hope through our collaborative effort, we will bring more resources and evidence to this important issue and have a real impact on policy and system change.

Thanks to all of our experts for your participation, and to all of you who have followed our discussion online. Stay abreast of the work of the Mortgage Servicing Collaborative on our program page and subscribe to our newsletter to stay informed of the Housing Finance Policy Center's latest research work.