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60 It is indeed refreshing to see that many residential mortgage loan servicers today have begun internalizing and are no longer resisting efforts to work with homeowners to not only collect debt but to also offer borrowers support by providing creative debt restructuring alternatives that may ultimately improve loan performance and maximize cash flows. At the onset of the governing principles put forth the by the Consumer Financial Protection Bureau (CFPB), servicers either resisted or struggled to accept many of the underlying guidelines. Today, leading servicers have incorporated CFPB's principles into their core default management strategies and have revamped internal processes accordingly. According to servicing executive Matt Kobin, who's held default management positions at JPMorgan Chase and Credit Suisse, "When the [CFPB] guidelines were first introduced, many in the industry viewed them as overshooting the root causes of the crisis, providing negligible lift in enhancing servicer or borrower performance, and instead offered borrowers a set of rights to challenge legitimate default actions. True, there are certain CFPB directives that make it more difficult and costly for servicers to respond with baseline activities and may even offer homeowners a window to exercise strategic default tactics. However, since [CFPB] guidelines are here to stay, unintended impediments like these are a cost of operating in the servicing space and best addressed by ongoing process management." By no means does the CFPB represent a panacea that servicers should wholeheartedly embrace without questioning. Like a variety of underlying consumer protection laws, the CFPB clearly has its share of bureaucratic red tape that may make things much more difficult and more costly for servicers to do their jobs. Borrower protections offered by the CFPB and other consumer protection regulations are designed to help put borrowers on an even playing field across all servicers. Today's borrowers are much more aware of regulatory requirements of servicers. For those borrowers interested in seeing how far they can go without paying their debt and delaying foreclosure (often referred to as "strategic defaulters"), they will work the system to their advantage, oftentimes looking for specific instances where servicers have failed to comply with the "letter of the law." As such, it I N D U S T R Y I N S I G H T / V I N C E N T S P O T O Teaming with homeowners is paramount to providing first-rate default management service. THE BUREAU EFFECT: THE NEW DEFAULT PROCESS