Loan Servicers and the Mortgage Crisis

In an effort to stem the effects of the financial crisis, financial regulators have turned their attention to the mortgage servicing industry.  The regulations being proposed would require servicers to improve their processing system, to halt foreclosure during modification negotiations, and to provide borrowers with a single point of contact. 

These proposals have been met with resistance from the mortgage industry and a wide coalition of consumer advocacy groups including the Center for Responsible Lending, the Consumer Federation of America, and dozens of regional housing groups. 

The Capstone workshop's final report aims to determine the incentives of mortgage servicers and how those incentives influence their actions.  On behalf of the Congressional Research Service (CRS), primary survey data was gained through interviews with a wide cross-section of market participants.