Decidedly Downbeat Mood on Real Estate
Speakers at the California Mortgage Bankers Association's Western States Loan Servicing Conference here were largely pessimistic about the prospects for a quick recovery in home values and loan performance, especially for the subprime mortgage sector.
And that means mortgage servicers will continue to face pressure as they manage a rising delinquency and foreclosure management workload.
"The eyes of the industry are really on us. We are in the throws of another cycle," said Scott Whittle, an attorney with Incal Associates, Los Angeles, who chaired the conference.
He said servicers are again being asked to essentially bail out what loan originators delivered to their shops during the boom times, as an expanding menu of loan products were developed to serve homeowners.
William Leroy, head of the American Legal & Financial Network, said the industry has never faced a time like the present before.
"It's going to be a wild ride over the next couple of years."
He doesn't expect the market to recover before the end of 2009, as the industry struggles to contain fallout from weakening home prices and the reset of adjustable-rate loan products to higher payments. That has set off a potential litigation boom, with troubled borrowers and their attorneys scrutinizing loan documents and servicng practices to try to stave off foreclosure.
Michael Drawdy, senior vice president for home retention at Countrywide Home Loans, said his company is preparing for an increase in short sales as troubled borrowers struggle to find a way out. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.bondbuyer.com/ http://www.sourcemedia.com/