August 28, 2016
From David Dayen at Salon:
It shouldn’t be terribly difficult to accept a monthly loan payment from a homeowner or a student borrower, and to manage day-to-day operations on the loan. This is the job function of a servicer, a company that handles loans on behalf of the ultimate owner, funneling payments through the system and deciding how to manage defaults.
Why this has become the most impossible business in America doesn’t make a lot of sense. But with evidence mounting up, we should acknowledge that servicers either don’t know what they’re doing or can’t turn a profit on their operations without doing so at the expense of their customers. And we must start thinking about alternatives to the current servicing model, which appears to be hopelessly broken.