The National Mortgage Settlement between state attorneys general and the federal government on one side and major mortgage servicers on the other is likely to affect the way small servicers and subservicers do business.
We fully expect these smaller firms to adopt the procedures set forth in the settlement terms for the country’s largest loan servicers.
One strong indication of this is recent discussions in the industry of loan modification preparation and turn times. The servicers we work with are setting the standard of following either HAMP or GSE timelines on loss mitigation.
Another area that we have seen a surge in is the proper documentation of the servicers to prove their authority to file a foreclosure action. Servicers are verifying this authority at an earlier stage of the borrowers’ delinquency cycle. This is further indication that they are implementing steps required for pre-foreclosure referral notice to the borrower. The inquiries we are getting show us that others may be leaning towards the thought process that standard mortgage servicing guidelines will be in place sooner then later for the industry. With that being said, a proactive approach by the small servicers and subservicers will prove to be beneficial in several areas - not only customer service but their overall bottom lines, as well.
