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ew regulations have the propensity to
transform the mortgage industry into a
system where servicers deliver, regulators protect,
and consumers trust again. e Consumer
Financial Protection Bureau's (CFPB) mortgage
servicing regulations aim to do just that—get
delinquent borrowers into loan modification
plans and establish effective communication
channels between the servicer and borrower
to ultimately protect them from foreclosure.
However, there is a price to pay to achieve
stabilization within the industry, and small to
mid-size servicers will be impacted the most.
e CFPB's mortgage servicing regulations
are broad and encompass multiple areas of
operations in a servicing company; however,
early intervention, continuity of contact, and loss
mitigation for delinquent consumers, as well as
accurate reporting for all, are the top mandates
and toughest obstacles servicers will place the
most time, money, and effort into while on the
road to compliance. Because small to mid-size
servicers often lack the resources—personnel,
technology, and training, among others—to
I N D U S T R Y I N S I G H T / B A R R Y H A Y S
COST OF
COMPLIANCE:
COMMUNITY-
BASED SERVICING
Do regulation costs outweigh potential business and
industry benefits for small to mid-size servicers, or have
these companies put controls in place to weather any
market condition?