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December 8, 2011: MBA Urges FHFA to Maintain Current Servicer Compensation Model
MBA filed a comment letter with the Federal Housing Finance Agency (FHFA) in response to its "Alternative Mortgage Servicing Compensation Discussion Paper," a September proposal to overhaul the mortgage servicing compensation system that has the potential to dramatically change residential servicing, origination, and secondary market operations.
Additionally, earlier this week, MBA released a sample comment letter for others to submit (see December 6th update below).
December 6, 2011: MBA Offers Sample Comment letter on FHFA's Servicer Compensation proposal
MBA invites industry members to use its sample comment letter as the basis for responses to the Federal Housing Finance Agency (FHFA) on their proposal. Please feel free to share this with any industry colleagues who may also be interested in responding to FHFA on this very important issue which has implications for all aspects of the housing market.
This comment letter (and MBAs larger comment letter which is expected to be submitted in the coming days) raises three points:
- MBA does not believe that there should be any change to the current servicer compensation model as this model has served the market well for decades.
- The changing regulatory environment makes consideration of any change to the model premature at this time.
- If FHFA is determined to adjust the current compensation structure, a majority of the members of the MBA believe that the cash reserve model is the best option and also the only option that meets the stated goals of FHFA.
Download the sample comment letter now.
All comments are due to FHFA (Servicing_Comp_Public_Comments@FHFA.gov ) by December 26.
May 12, 2011: MBA Releases White Paper and Testifies on the Future of Residential Mortgage Servicing
Today, the Mortgage Bankers Association (MBA) released a new white paper which provides background information and an environmental scan of the events leading up to the current foreclosure crisis and looks at some of the myths surrounding servicer incentives in the loss mitigation process. The white paper was released in conjunction with MBA’s President & CEO, David H. Stevens’ testimony before the Senate Committee on Banking Housing and Urban Affairs Subcommittee on Housing, Transportation and Community Development on “The Need for National Mortgage Servicing Standards.” Read the testimony. The white paper is the result of work by the Council on Residential Mortgage Servicing for the 21st Century, a 25-member task force representing MBA's diverse membership base. Read the White Paper.
Residential mortgage loan servicers have come under heavy scrutiny in the last several years as a record number of homeowners have fallen behind on their monthly mortgage payments and have lost their homes to foreclosure. In response, mortgage lenders, servicers, investors, policymakers and other stakeholders have launched innumerable programs and initiatives to stem the tide of foreclosures that have caused borrowers to lose their homes and communities to deteriorate.
In spite of all of these efforts, the depth and breadth of the credit crisis has been overwhelming for the even the best intentioned mortgage servicers and for the long term, essential changes must be made to the servicing business model.
That is why, in December of 2010, the Mortgage Bankers Association (MBA) launched the Council on the Future of Residential Mortgage Servicing for the 21st Century. The Council was tasked with providing recommendations to industry and government for improving the future state of mortgage servicing. Read the press release.
On January 19, 2011 the Council hosted the Summit on Residential Mortgage Servicing for the 21st Century. The meeting brought together industry leaders, consumer advocates, economists, academics and policymakers to take a detailed look at the issues that have vexed the industry and sought to identify the essential building blocks for the future of loan servicing.
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