On December 19, 25 members of our Mortgage Servicing Collaborative (MSC) met in person for the second time in 2017 to discuss the MSC’s progress, to review research briefs on the Federal Housing Administration (FHA) foreclosure and conveyance processes (FHA brief) and on government loan modifications in an environment of rising interest rates (loan modifications brief), and finalize plans for 2018.
We agreed to publish an initial brief to provide basic information about servicing, detail the need for reform, and establish the framework for all future briefs. This framing brief was released in January 2018 and focuses on the following:
- Why the MSC exists and the problems we are trying to solve
- Why servicing is important and why people should care that it is done right
- Lessons learned from the 2007 foreclosure crisis and subsequent Great Recession and how those lessons can be applied to improve servicing in today’s postcrisis environment
- How solving challenges in mortgage servicing improves the overall consumer experience and improves access to credit
Upon further discussion of the recommendations associated with the FHA brief and the loan modification brief, we agreed that the FHA brief needed additional context and work. The loan modification brief was finalized and released shortly after the framing brief. We will publish the FHA brief in late January or early February.
Over lunch, MSC members received a Washington, DC, update from Urban Institute senior fellow Jim Parrott on housing finance reform efforts on Capitol Hill. Members discussed and stressed the importance of weaving mortgage servicing issues into the conversation about housing reform.
Much of the afternoon focused on collecting feedback on our newest project, which focuses on servicing regulations at the state and federal level and attempts to recommend areas for aligning rules and regulations across all agencies to create national servicing standards. The members agreed that servicing compensation should be another MSC priority. We also discussed the importance of financial technology (fintech) and the fact that servicing is ripe for technology enhancements, as well as the general nexus of fintech with regulation.