The Obama administration's latest “housing scorecard” suggests there is some progress when it comes to servicers' ability to fulfill the aims of regulatory programs that encourage mortgage rehabilitation, according to one expert.
“I think we're seeing an upward trend, even if it's just a small one,” Ghazale Johnston, senior executive, Accenture Credit Services, told this publication when asked about the February housing scorecard and whether it shows progress in this area.
“There was some improvement in terms of the metrics that the servicers report,” Johnston said, noting that these were cast “in a little bit more of a positive light than the previous months.
“A lot of the processes that have been absorbed [and] rolled out by these servicers have started to take shape, and the servicers are now having some more success in handling the various government programs. We're seeing an increase in the overall amount of modifications that are being made as well as an improvement in the quality of the modifications that are being made,” she said.
Johnston said servicers “are not only are adopting some of the processes and making some of the changes within their organizations to identify [qualifying] borrowers a lot more efficiently, but they are more effective in the negotiation and the approval process and in determining eligibility.”
When it comes to a lot of the programs that have been rolled out, it appears “some of the kinks have been worked out. Whether it's because the servicers have been able to apply more tools or are making sure they are applying the appropriate eligibility criteria and ensuring that those that are most suitable for a mod are being brought through the process efficiently,” she said. “That's one way of looking at it. Another way of looking at it is they created the workforce structure that allows them to fulfill those programs under the rules which they've been defined in a way that allows them to see some benefits.”
Central to the ability to do this has been the process of ensuring that the income used to determine borrower qualification gets calculated correctly, said Johnston.
“One of the biggest drivers for being able to ensure that a borrower is going to be able to make the new obligations that have been set out in front of them is being sure that you have calculated their income correctly and that's, I think one of the biggest improvements to come out in this report,” she said.
Going forward, Johnston said, “I should hope we continue to see improvement, but a lot of this depends on the rate servicers are able to absorb even more [regulatory] changes.
“Hopefully a lot of them now have set up the governance within their organization so that they can absorb these changes so that they don't introduce volatility to their current operations,” she said. “That's really going to be the outstanding question. How much more change is going to come down the pike, and have they got the program management processes set up such that they can prioritize and allocate resources appropriately to deal with all of those additional requirements?”
