Regulators Look At Loan Servicers

Posted on February 8, 2011

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‘ “If we fail to act decisively now to deal with the foreclosure crisis, we risk triggering a double-dip in U.S. housing markets,” Sheila Bair, chairman of the Federal Deposit Insurance Corp., said in a Jan. 19 speech to mortgage-industry executives in Washington. “The problem is serious, and the need for action is urgent.”

Changes being studied include a new fee structure for servicers, independent reviews of rejected requests to ease loan terms and a fund to compensate victims of improper foreclosures, according to Bair and other federal and state regulators. Lawmakers have proposed reining in the privately run Merscorp Inc., even as the company says it could serve as a national mortgage registry. ‘ See article here.

Much of the difficulty in actually getting a loan modification or workout is that there is no incentive for the loan servicers to agree to any arrangement. The purpose of rewriting the rules for compensation for loan servicers is to encourage more loan modifications to be performed.

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