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CENTER STAGE WITH THE CEO default servicing | in print and online When Is Enough Too Much? for me rly PUBLISHER EDITORIAL DIRECTOR The industry has made immense strides in its efforts to assist distressed homeowners and preserve the ideal of homeownership across the United States, and that's why it is so disconcerting to me to witness the breadth at which those disconnected from our housing finance system place responsibility on the shoulders of the banking system. To what extent does ownership of the decision to own a home lie with the consumer? Is it now the responsibility of the creditor to police the American Dream? Does such a dynamic not complicate the sanctity of a contract? And where does it end? We're dealing with parameters from the Consumer Financial Protection Bureau and fashioning credit to fit specific definitions of Qualified Mortgage and Qualified Residential Mortgage—all these layers and blankets of protection have been applied to homeowners, essentially relieving them of making a responsible decision of whether or not to own a home. The responsibility now rests with the banking industry; it's become incumbent upon lenders to protect and almost ensure the validity of the debt. While I appreciate the administration's efforts to fix the housing crisis and put controls in place to prevent a repeat of the subprime meltdown, I am concerned that the result may be a "Nanny State" in which lenders, investors, and their servicers are forced to babysit consumers' financial well-being. Take into consideration that more than 1.2 million loan modifications have been granted through the government's Home Affordable Modification Program (HAMP) since the program launched in March 2009, and that number will only increase now that HAMP has been extended for another two years. The result has been the prevention of hundreds of thousands of foreclosures, but it's also restrained any future assistance that can be provided—let's hope the economy doesn't take a step back from its meager recovery and none of those homeowners lose their job down the road because how do you modify a loan when you've already dropped the interest rate to a belowmarket 3 percent, already sliced off some of the principal, rolled the past due payments back, and extended the term to 40 years? Many of these loans are so sliced and diced that there's nowhere for the servicer to go from here. Homeowners have been helped to maximum capacity. The assistance provided maximizes the benefit but minimizes any future corrective action. We've got no wiggle room if the homeowner runs into any trouble later on. While well intended, the government's relief measures have manifested in a growing population of consumers who will no longer be able to receive the benefits of loss mitigation. When is providing enough assistance to force stability too much? DSNEWS.COM EDITOR DSNEWS.COM VIDEO EDITOR STAFF WRITER CONTRIBUTING WRITERS COPY EDITORS EDITORIAL ADVISORY BOARD DESIGN ADVERTISING DS NEWS BLACK BOOK AND LEGAL LEAGUE 100 SOCIAL MEDIA CIRCULATION magazine Mark Hulme Carrie Bay Esther Cho Jordan Funderburk Tory Barringer Steven S. Albert, John Burns, Ernest W. Durbin II, Jed Kolko, Mark Lieberman, Tami Rund, Brent Taggart, Rachel Williams Heather Hill, Alison Rich, Cassie Smith, Emily White Youree Jerry Alt, LOGS Network Amy Crews Cutts, PhD, Equifax Steven Horne, Wingspan Portfolio Advisors Jeffrey Jaffee, CitiMortgage Rick Sharga, Auction.com David A. Trott, Esq.,Trott & Trott P.C. Jonathon Won Jason Myers: 214.525.6760 Thomas Griffin: 214.525.6754 Ryan McLemore: 214.525.6723 Robyn Clayton: 214.525.6716 David Hoierman: 214.525.6728 Kelli Snowgren: 214.525.6786 Blake Stepan Rebecca McDowell CHAIRMAN AND CHIEF CREATIVE OFFICER Mark Hulme PRESIDENT AND CHIEF EXECUTIVE OFFICER Ed Delgado CHIEF FINANCIAL OFFICER John Harrison EVP OF CLIENT RELATIONS & STRATEGY DIRECTOR OF ACCOUNTING MARKETING DESIGN Chris McCormick Ernest Gillespie Matt Hulme Sean Walker Jason Stone Jonathon Won PRODUCTION Luke Rose TECHNOLOGY Ed Delgado vol. 11 no. 8 Brandon Shangraw Chris Warren CHIEF ECONOMIST Mark Lieberman Follow DSNewsDaily on President and CEO The Five Star Institute No part of this publication may be reproduced without written permission from the publisher. ©2013 REO Publishing LLC All Rights Reserved Ed Delgado is president and CEO of the Five Star Institute, the parent company of DS News. He has more than 20 years' experience in mortgage banking and has appeared on CNBC and ABC World News Tonight and is frequently quoted in the Wall Street Journal and New York Times. 2 This publication is intended to provide accurate, authoritative, and detailed information in regard to the subject matter covered. All written materials are disseminated with the understanding that the publisher is not engaged in rendering legal advice or other professional services. Under no circumstance should the information contained herein be relied upon as legal advice as it is designed to be a source of information only. strongly encourages the use of qualified attorneys or other qualified experts with regard to the subject matter covered. does not guarantee the accuracy of the information and is not liable for any damages, losses, or other detriment that may result from the use of these materials.