Fitch: Servicer Scrutiny Has Brought Benefits

As regulatory scrutiny has intensified, servicers of U.S. residential mortgage-backed securities have implemented mostly positive operational changes, according to a recent survey by Fitch Ratings.The predominant changes took place in customer service, borrower communications, dispute resolution, fees charged, payoff practices, collections, and default management, the rating agency reported. "Developments such as online call scripting, enhanced monthly billing statements and payoff quotes, and the advent of the one-call resolution indicate that while servicers have different approaches to customer service, all of them take the quality of borrower interaction very seriously," said Thomas Crowe, a Fitch director. Most of the changes are positive, but the use of extended or multiple repayment plans and modifications, and incentives to collectors to keep loans out of foreclosure, may lead to higher losses on some mortgage pools in the long run, the rating agency said.