What’s Driving Mortgage Servicing?
As Director of Structured Finance at S&P Global Ratings, Steven Frie’s primary responsibilities entail performing onsite reviews of mainly residential, and some asset-backed servicers, with subsequent production of an analysis and ranking of the entities’ operations. He recently spoke to DS News about the new trends he’s seeing in the servicing industry and his insights into the origination side of the business.
What trends are you seeing in the servicing industry this year?
One of the notable trends is the continuous growth of many non-bank servicers as they persist in their efforts to expand their servicing businesses through portfolio purchases of distressed accounts while also continuing to expand their portfolio of prime loans serviced.
Additionally, although the Bureau of Consumer Financial Protection (BCFP) has adopted a somewhat less assertive approach to enforcement, they continue to be involved in investigations, and most notably, many states have conversely indicated they will take a more assertive approach to regulation.
Finally, servicers are more active in exploring artificial intelligence (AI) within their operations to reduce manual processes, and concurrently, reduce costs as the cost to service a loan has risen substantially over the last several years. All of these trends will continue into 2019.
Radhika Ojha, Online Editor at the Five Star Institut