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continue to remain compliant when
functioning as a single point of contact for
borrowers by being properly trained and
monitored. Having the compliance and
regulatory rules embedded in the operating
systems, along with proper scripting will
remain a requirement. As you go across
hundreds of people in a servicing operation,
the need for consistency is paramount,
especially with all the upcoming changes
that could be taking place and the changes
that continue to take place as a normal part
of the compliance cycle.
What other anticipated changes do
industry professionals need to watch this
year? Because of rising interest rates, the
market has become primarily a purchase
market. e refi business has slowed down
tremendously, impacting the servicer's
runoff rate on the portfolio, along with
the value of the mortgage servicing rights.
We are seeing origination growth in the
Federal Housing Administration (FHA) and
purchase products along with an emergence
of non-QM originations. is coming year,
we will see that trend continue which could
impact delinquency and nonperforming loan
volumes.
e growing FHA portfolios will
continue to be a challenge for servicers to
manage. Managing a delinquent FHA asset
requires a lot of diligence and cost with
severe penalties and fines, if not managed
correctly. In terms of adherence to FHA
servicing guidelines, the emphasis will be
focused on managing title, property, and
valuation issues earlier in the delinquent
lifecycle. is practice will mitigate risk,
avoid conveyance, and lower servicers' costs.
is year, you will also see a more
aggressive oversight process when it comes
to managing third-party vendors. e risk in
today's market is that vendors who have seen
a reduction in their volumes are not investing
in their infrastructure. is will ultimately
result in vendor consolidation and certain
vendors potentially going out of business.
ese scenarios require servicers to work
with vendors who have a strong balance sheet
coupled with a strong compliance and vendor
management platform.
"For the last
several years,
servicers have
been complying
with state and
local regulatory
agencies and
putting the proper
process, training,
and technology
in place to help
employees maintain
compliance, and
they have done a
fantastic job. Now,
with changes at the
head of the CFPB,
some of those rules
will obviously
change, while some
of those rules may
be eliminated."
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