Looking at the continuing foreclosure crisis, with a couple of million resolutions done, a couple million more to do, and more than a million units of shadow inventory waiting in the wings, one is reminded of Winston Churchill's pronouncement during World War II that while it might not yet be the beginning of the end, at least it is the end of the beginning.
Attendees of SourceMedia's annual Mortgage Servicing Conference, to be held this week in Dallas, will get a good eyeful of this “end of the beginning” landscape. And prudent lenders and vendors should also be starting to think about what a more normal servicing environment will mean for them.
Because it is coming. No one is exactly sure when (three years?), but it is coming.
There will come a time when distressed debt will be in the minority (and then later a time when it is in the vast minority). And that will be the time for servicers (and originators) to show what they've learned from the mortgage mess.
For instance, there has always been a big wall between the originations and servicing side. Front office/back office, right? But that's not the way the integrated lender/servicer of the future should go.
We've already seen considerable overlap between the two niches, as thousands of loan officers fired in the collapse were re-hired as servicers (in some cases servicing mortgages they originated themselves!).
And originators now are much more aware of risk management and loss mitigation at the point of sale than they used to be. This kind of mixing of traditional duties can and should continue. Best practices in origination should take from best practices in servicing.
For instance, originators have always acted as a “single point of contact” for their borrowers. Now, servicers are being directed to do the same thing.
Who knows, in the future there may be a single point of contact from prequal through reconveyance!
And, it goes without saying, more careful underwriting on the originations end will translate into fewer problem loans on the servicing end.
The MSC will feature a stellar lineup of keynoters, panel sessions, breakfast briefings and an off-the-record servicer peer review. We will also tape an on-the-record industry roundtable—watch for a transcript in an upcoming issue of National Mortgage News!
