Unless incentives change, mortgage servicers won’t

Despite the drag of the housing crisis, the underlying economics of the servicing business remain strong, especially for large banks operating on a grand scale. This is because the higher costs associated with defaulted loans, while real, are outweighed by servicer profits from efficient collection of on-time mortgage payments, industry data and interviews suggest. Because the lion’s share of compensation is derived from loans that cause no problems, competently handling nonperforming loans is not a compelling business model. Being big is.