Uncertainty, Regulation, Continue to Worry Insiders

David Kittle of IMARC (right)

"The banks and everybody involved that settled is certainly saying that its time to move forward. I agree with Scott, the proof is in the pudding at the end of the day, and you have to see how its going to be implemented, how fast. I dont know if concern is the right word or even worry. I dont know which word I want to use there, but what theyre talking about in the settlement, having all these loans be done at FHA, I wonder how thats going to take place and be implemented. The constraints the FHA is under today financially and their staff if theyre prepared to handle, if it gets to the volume that they think and hope that it will." "The compliance now goes all the way to the new regs, compliance with the origination of the loan, which ends up in the servicing pot. To Scotts point, Ive owned all or part of three mortgage companies in my 34-year career. I wouldnt open another one today."

Rachel Dollar, attorney at Smith Dollar in California (right)

"Just from the legal perspective, I think that the servicers have been implementing and dealing with a lot of issues that are covered. The VC settlement, the DOD consent order and these issues have been out there, the affidavits, robo-signing and theyre addressed here again and until the details are released, its going to be difficult to tell individually anything new or anything thats going to come ofand in a different way that theyre going to have implementing new standards, because it is out there and they have been dealing with them already."

Scott Slifer, president of ISGN (center)

"Compliance is the whole complexion of how these new compliances have changed. Historically it was about compliance on the origination side, if you think of thisthis is like a sampling. If my 10% was good, then my entire portfolio was good. Whereas now compliance is really more ofits kind of an on/off switch, and its a go/no go as to whether or not youre even in business. Its not necessarily an option of certainly under which you get creative. So obviously the cost impact is tremendous. As Ive talked to our servicing clients, the rules they havethat theyre implementing as we speak, is if they agree that theyre the right things to do. Hopefully people provide some flexibility to where we consume the business."

Laura Hadley of Quandis (right)

"Everyone that Ive talked to, I mean these changes are very strenuous on resources. Its very difficult to train, to hire, to find people. Staffing has increased and every time they get a process down or work properly, something else changes and they have to find another way to do that process or add to that process. And its very difficult. Everybody Ive talked to said its very difficult right now. And they dont expect it to get any better." "I happen to know a servicer thats getting ready to take on some of those that extra servicing thats out there. And theyre ready or theyre getting ready. Then again it takes staffing, it takes training, it takes kind of ramping up and again, being prepared for all those compliance issues and its kind of a different way of servicing that theyre not necessarily doing today. And but theyre ready to try and its in the best interest that they do ramp up in making those changes."

Scott Stoddard, CEO of Quandis (right)

"How long its going to take for the shadow inventory to work its way through? I think its going to be at least 2015, 2016. I was talking with a friend of mine yesterday who mentioned that Bank of America has 1.2 million people that are 60 days delinquent. That doesnt get through in 2012 or 2013. And because youre not going to see a huge rise in home prices, hopefully theyll maintain, whereas some say they expect it to go up 4.5% by the end of the year nationally. I find that hard to believe. But we can at least get things flat, start takingto find a good base that we can start having these short sales or REOs or whatever they are, solved. The total increase of how many people are under water is just killing us. Its not going to be over anytime soon, but the sooner we can get to a flat market, the sooner we start clearing out that shadow inventory. And I think its another three or four years."

Brent Stokes, Sperlonga

"Ill probably say a little bit past three years. The unemployment ratewe dont know what the real new normalized unemployment rate is going to be. Is it now going to be acceptable for us to carry 5%, 6% unemployment? Now work backwards and quantify that as to how many individuals didnt have to give up those homes. The other factor is between this yearnext year, between 2000 and 2007, how many loans did we actually do, to your point Mark, that they actually should not have done, or the borrower should not have tried to acquire? The percentile changes in employment or 8% increase in the value over the next three years are not going to change those personal financial situations to a degree where they can all of a sudden afford a home that they could not afford in the first place. So I would say 2015 or 2016for personal reasons."