Every servicing exception needs an owner and a clock

The Mortgage Bankers Association's data highlights a crucial issue in the mortgage servicing industry: the cost of managing nonperforming loans versus servicing exceptions. With nonperforming servicing costing $1,573 per loan compared to $176 for regular servicing, it's clear that exceptions can significantly drive up costs. This disparity underscores the importance of efficiently managing and resolving servicing exceptions to minimize financial impact.

In the context of the mortgage industry, servicing exceptions refer to irregularities or issues that arise during the loan servicing process, such as modifications, workouts, or other non-standard servicing activities. These exceptions require dedicated attention and resources to resolve, which can be time-consuming and costly if not properly managed. The MBA's data suggests that having a clear owner and timeline for resolving these exceptions is critical to controlling costs and preventing them from escalating.

For mortgage servicers and investors, the key takeaway is to prioritize the efficient management of servicing exceptions. This involves establishing clear protocols and accountability for exception resolution, as well as implementing effective systems and processes to track and manage these exceptions. As the industry continues to navigate changing regulatory requirements and market conditions, keeping a close eye on servicing exception management and its impact on costs will be essential.

Originally reported by housingwire.com. PaintNews adds analysis for real estate & property readers.