The Rise of Non-Bank Mortgage Servicing Companies – Part II

foreclosure and real estate lawyer in New YorkServicing $10 Trillion Dollars of Mortgage Loans

Non-bank institutions which service mortgages have grown at an incredible rate in the past few years. The largest fifty non-bank mortgage servicing companies handled almost $10 trillion dollars in mortgage loans in 2014. Non-bank servicing organizations accounted for almost 30% of these loans last year. In 2010, they accounted for only 7% of these loans. Ocwen serviced nearly $400 billion dollars in loans in 2014, and NationStar Mortgage serviced more than $377 billion dollars in loans. This is 500% more than they serviced in 2010.

Large Employee Turnover

These non-bank institutions have large turnovers of their employees. It makes it extremely difficult for homeowners to reach the same individual at these institutions to deal with their problem. This can create a gut wrenching situation for the homeowners who are trying to straighten out administrative problems caused by the servicing agencies.

Non-bank servicing companies are much harder to work with than traditional financial institutions. They are not as well equipped or well versed in issues concerning loss mitigation.

In 2014, the Consumer Finance Protection Bureau imposed new mortgage servicing requirements on both banks and non-bank servicing mortgage companies. Under these new rules, all mortgage servicing companies are supposed to create a “single point of contact”. This single point of contact is designed to help homeowners with troubled loans.

Approximately a year ago, the New York Department of Financial Services blocked a transfer of almost $3 billion dollars in mortgage servicing contracts from Wells Fargo Bank to Ocwen. In December 2014, Ocwen reached a $150 million dollar settlement with the New York Department of Financial Services concerning abuses and conflicts of interest. Hopefully in 2015, this New York agency will be able to regulate these non-bank servicing institutions and/or motivate them to provide higher quality levels of service to the tens of thousands of beleaguered mortgage holders who are forced to deal with them.

New York foreclosure defense attorneyElliot S. Schlissel is a foreclosure attorney. He helps homeowners with homes which have gone into or are going into foreclosure. He is the author of more than 400 articles on his blog concerning foreclosure defense.

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