Dear Mortgage Professional,
The current mortgage industry crisis – the worst in a generation – points up the fact that this is a very complicated market. As originations decline, and as rates stay low, servicing becomes a valuable commodity, one that generates valuable and stable fee income for lenders.
Consumers are trying to juggle a rising tide of bills – including adjustable-rate mortgages that are re-setting to higher rates, rising home equity and credit card debt, and higher gas prices – and they are feeling the pinch. To top it off, home values nationally are expected to fall this year for the first time since the Great Depression, and many economists believe the housing downturn is far from over. According to the Government Accountability Office report approximately 1.1 million foreclosures are expected in the next six to seven years. And more than 2 million adjustable rate mortgages are scheduled to reset by the end of 2008.
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Market participants and regulators are strongly encouraging banks and loan servicers to try to find refinancing or restructuring opportunities for these financially strapped homeowners. It’s in everyone’s best interest to avoid massive foreclosures. Lenders and investors will ultimately benefit. You’ll come out ahead of the game with a performing mortgage that’s being paid versus having a loan that’s in foreclosure.
As servicers cope with these challenges that are predicted to linger for at least another year, it’s necessary to come up with creative solutions for tackling the problems head on. Innovation, after all, tends to come in troubled times. It’s important for servicers to quickly reassess their tools, staffing, training, timelines and vendor relationships.
Find out how to take full advantage of the innovative opportunities stimulated by our current troubles at the 2nd Annual Mortgage Servicing Conference, April 17-18, 2008 at The Westin Park Central in Dallas, Texas. Register Today for BEST RATES!
Regards,
Mark Fogarty
Group Editorial Director
National Mortgage News / Mortgage Technology
