MBA council to investigate national mortgage servicing standards
A council created by the Mortgage Bankers Association released a white paper Thursday detailing aspects of the housing crisis. The Council on the Future of Residential Mortgage Servicing for the 21st Century was established in December 2010 to provide recommendations to industry players and government officials for improving the future state of mortgage servicing. The white paper is the first release from the council. While the white paper does not make any explicit policy recommendations, it does specify what the council will be investigating next. In analyzing issues that surfaced during discussion about the servicing industry, the Council on the Future of Residential Mortgage Servicing for the 21st Century said it plans to address national servicing standards, legal issues surrounding servicing and the economics of servicing. The council plans to review existing national servicing standards, especially in dealing with large volumes of nonperforming loans. The council also formed a working group called National Servicing Standards Working Group "to study and make policy recommendations related to a national servicing standard." David Stevens, chief executive officer of the MBA, said Thursday morning in testimony before the Senate Banking Committee that a cohesive, national servicing standard is necessary; however, different policies and regulations are creating an uncertain and variant picture. In analyzing legal issues, the council will look at the foreclosure process, chain of assignments and endorsements, among other things. Another working group called the Legal Issues Working Group will study and make policy recommendations in this area. The MBA formed a group called the Economics of Servicing Working Group to analyze the proposed compensation structure from different perspectives in the industry, including small servicers, depository and nondepository institutions. "Each of the working groups intends to publish deliverables that will convey their findings and policy recommendations" sometime in the future, the MBA white paper said. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.