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If there is one takeaway so far from the 2013 MBA Servicing Expo & Conference, it’s that compliance is king and the servicing industry is focused on the constant stream of mortgage servicing rights transfers currently surfacing in the market.
But the verdict on how to view the massive MSR transfers is still out from both a regulatory and compliance standpoint.
The Consumer Financial Protection Bureau's associate director for research David Silberman briefly mentioned the CFPB's goal of insuring consumers are protected as loans are transferred from one company to another during the MBA's general session Wednesday. The agency even released an MSR transfer advisory earlier this month.
From a technology standpoint, Matt Lichtner, executive vice president of national sales for Decision Ready and EVP of strategic relationships Bill Garland expect demand to increase for cloud-computing technology solutions that can assist with compliance and precision in the loan transfer process.
"There is a big gap right there when the loan closes and it comes off the LOS and it gets into to the servicing system, that's one piece," Lichtner said.
But how big the MSR transfer problem is in the grand scheme of things depends on the cost-benefit analysis you run on the transfer itself, and on who ends up servicing the loan at the end of the day.
"I think it's better if a distressed borrower's loan is moved to a special servicer, because those organizations are ideally suited to work with distressed borrowers, and help them avoid foreclosure," said Rick Sharga, executive vice president of Carrington Mortgage Holdings. "It's not so much that the loan will be serviced 'properly,' per se, but that special servicers tend to be very good at doing successful loan modifications, or executing short sales as an alternative to a foreclosure."
The focus, he notes, is on the loan being serviced properly and that is generally achieved through a transfer to a high-touch or specialty servicer.