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» VISIT US ONLINE @ DSNEWS.COM President Obama greets constituents at a rally. The president faces tough dilemmas as he heads into his second term. First up: tackling the fiscal cliff. whole is likely to be pushed to the back burner in 2013, as Congress deals with the fiscal cliff and tax and entitlement reform, the firm surmises. Others put the GSE reform timetable out even further, to at least the mid-term elections in 2015. How exactly might this inaugural season and continuation of power affect lenders, REO sales agents, property preservation professionals, and others in default servicing? Several industry experts predicted that regardless of which candidate voters preferred, the shadow inventory will begin to make its way onto the market now that the election is decided and a leader is installed. The election itself as opposed to the actual victor, they assert, is the catalyst for a positive market change with the potential to jumpstart a self-correction cycle simply because a big unknown has been removed from the equation. Others, however, placed little stock in the idea that the November election would move foreclosed properties from the shadows. Barbara Mancovsky, division manager for Nationwide REO Brokers, Inc., in Massachusetts, commented, "The reality is that banks and servicers have been dealing with a lot of change since the crisis began. In addition to the changes, default professionals are trying to catch up on the backlog since the pipeline locked in August of 2010. Add to that the challenges associated with new regulations, which seem to come out faster than adjustments can be made … and it starts to get slightly more complicated." Mancovsky went on to say, "If we see [new] inventory post-election, it's just reflective of the timeline it took to get there and not based on the fact that an election happened to be scheduled at the same time." The biggest post-election housing issue, according to CNBC analyst Diana Olick, is mortgage regulation, with lenders facing new rules on underwriting and stipulations surrounding how much mortgage risk they are required to hold. While a Romney administration would have stopped some of the rule-making, albeit not all of it, Olick contends, new regulations will now go forward as planned. She says the mortgage industry is therefore reacting cautiously. The Mortgage Bankers Association issued a statement following Obama's re-election, saying, "[W]e are renewing our call on the president to appoint a federal housing policy coordinator to act as a 'traffic cop,' not to make rules and policies, but rather to ensure a coordinated housing policy where federal and regulatory agencies are effectively talking to each other as the rulemakings and policies are proposed and adopted in order to ensure that they complement each other." The trade group stressed, "We are at a very delicate time in a fragile housing recovery, and government and regulatory policies around housing need to be carefully thought out." 15

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