The Pros and Cons of a Changing Landscape
Insiders' opinions on the mortgage industry regulatory landscape, while quite opposite at times, converge into the recognition that it is a tough act to follow. Reasons start with requirements of the Obama administration's Homeowner Affordability and Stability Plan and its housing initiatives, which look like a work-in-progress list of compliance demands. Anything from how to conduct an appraisal, data transparency, or deadlines on loan modification processing, keep changing. There have been over 60 regulation updates on the Home Affordable Modification Program alone making compliance a hassle, according to insiders who caution regulators and the public must have more realistic expectations about modification processing and conversion rates.
It all adds to capacity challenges. HAMP was designed to offer solutions to up to 4 million homeowners, but only 100,000 have a permanent mod. By consensus major stumbling blocks are complete documentation packages and file evaluation. State-by-state regulatory differences are yet another pull back that inevitably increases cost and slows down servicers' output. On the other hand, the new landscape is generating demand for innovative tools that may be simple but effective, especially in processing those millions of modifications that hopefully will ease the foreclosure crisis. In addition, current challenges are directing industry efforts towards sustainable long-term solutions that make equal sense in the present.