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Issue link: http://digital.dsnews.com/i/105603
» VISIT US ONLINE @ DSNEWS.COM COVER STORY The Future of Default Servicing An Educated Outlook T his year might best be described as "eventful" or "pivotal" for default servicing and the many industry professionals working to lessen the reverberating impact of the downturn and kick-start their local markets. After 16 long months of negotiations, the nation's largest mortgage servicers struck what was described as a "landmark" settlement with state attorneys general and the federal government, home prices presumably finally found their floor, and the presidential election set the stage for housing policy four years out. The underpinnings of a national set of servicing standards took shape, and industry powerhouses trimmed their mortgage operations while several noteworthy name brands closed up shop altogether or became part of their competitors' organizations. While 2012 was rife with milestones and confidence-building achievements, it also brought a whole new genre of challenges and laid the groundwork for the makings of a new "normal" for the housing market—a norm that will take some adapting to for even the most seasoned industry veterans. As we look ahead to the start of 2013, corporate strategies are undoubtedly being drafted by a number of unknowns. How long will record-low mortgage rates continue? Is shadow inventory still a threat to home price appreciation? Will the REO rental market pick up steam? With 2012 quickly taking form in the rearview, DS News quizzed industry professionals and asked them to weigh in with their views on what the next year holds for their respective fields. Based on more than mere guesswork, these experts' projections are grounded in years of experience and based on defining market developments observed this year—the year that most agree marked the beginning, albeit a modest beginning, to the housing market's recovery from a six-year downturn that's undoubtedly changed the business of mortgage servicing and real estate finance. With the start of the new year comes new challenges, but also new opportunities. Learn what your peers and industry partners see on the horizon for REO inventory, compliance challenges, private capital investment, and many more issues making their way to the forefront of the agenda for 2013. Over the next few pages, their expert hypotheses unfold, and for those looking ahead to seize those new opportunities or those already preparing to meet tomorrow's challenges head-on, the insight these industry authorities share can serve as an important study guide. What lessons learned will you take with you into the new year to better position your business for success in the marketplace of 2013? 49