As clients know – some of them all too well – the long-awaited agreement was announced today between state and federal officials and the five largest servicers. From this will flow a series of similar agreements with the rest of the nation’s mortgage servicers, all of whom are now on notice as to what can happen to them if they don’t comply with all the new borrower protections and servicing protocols mandated by the settlement. These protections and protocols will, we believe, slow down foreclosures and sharply hike refi activity for all delinquent borrowers and now-current ones looking for a break. Delinquency numbers thus could spike a bit, but we expect the sum total impact of this agreement is to reduce foreclosures on current legacy books and put still more pressure on FHFA to agree to refis.
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