The servicing-related consent orders that the nation’s megabanks signed to appease banking regulators could impact smaller servicers too, according to consultants at Newbold Advisors.
"Even though they don’t have to comply with the consent orders, the small shops are going to have to comply within an industry perspective to be competitive," said Newbold managing director David Dill.
The former president and chief executive of Saxon Mortgage Services noted that the expense and effort needed to revamp foreclosure and loan modification processes (as outlined in the consent agreements) will push smaller servicers to consolidate. And they aren't going to be "happy mergers," Dill added.
He noted this could result in small shops merging with some of the mega-servicers -- or it could spur small and mid-sized servicers to create a new mega-servicer.
Newbold Advisors, based in Tampa, Fla., currently has a staff of over 250 consultants.
