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.