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» VISIT US ONLINE @ DSNEWS.COM 11 to the state administrative code that requires some of our servicing clients to provide visibil- ity to the borrowers on where they are at in the loss mitigation process. It was done quickly, and I know that some servicers were struggling to figure out how they were going to do that— whether they would need to modify systems that they already had in place. I haven't actual- ly heard from servicers how they're addressing that yet, but I believe there was some difficulty because of the way that passed and came into being, as well as the shortness of time. With Obduskey v. McCarthy Holthus recently having been settled by the U.S. Supreme Court, are there any other major cases default servicing professionals should be watching closely? at's a good question. Obduskey is interesting because it talks a lot about the non-judicial process, but, for whatever reason, our western states, although they're non-judicial states, tend to have higher rates of judicial foreclosures. It will be interesting seeing how that plays into things like a judicial foreclosure in the state of Oregon. If you look at the Oregon judicial process, it's more like a non-judicial in the sense that there's not actually a monetary judgment against most borrowers and there's not typically a deficiency judgment against most borrowers. You can only get it in certain circumstances, and it's pretty rare. So now what we're struggling with is, how does that apply to a judicial foreclosure? We don't know what it means for a state like Or- egon, where you don't have a means of collec- tion you would in a normal judicial foreclosure. Washington is a little bit different in that you can get a judicial or you can get a deficiency in most cases, as long as you plead it. As far as the western states, we're pretty quiet. We have already seen massive changes as far as borrower protections. California had the Homeowner Bill of Rights. Washington has the Foreclosure Fairness Act. Oregon rolled out mandatory mediation. It's an opt-out state, so you have to initiate mediation no matter what if you want to foreclose judicially or non- judicially. en the borrower decides whether or not they want to participate, but you have to do it. ere's some fine-tuning in the legisla- ture, but I don't anticipate anything huge for our states for the time being. Some people are predicting a recession around the corner, and if that happens, we'll see an influx of requests for loss mitigation. e difficulty, from a firm standpoint and from a servicer standpoint, is that as we've seen de- fault rates fall, you've seen staffing reductions. It's important to be able to take time and make sure that we're adequately staffed and ready to go, especially from a servicer's perspective, because that was part of the big problem when the last recession hit—they couldn't keep up with the level of loss mitigation requests that they were getting. Staffing is going to be prob- ably the biggest challenge. e industry is more prepared today than we were when the last recession happened, and that has its advantages and disadvantages. We're certainly more likely to have strong processes in place because of the enhanced auditing that we've gone through over the last few years. Some of the changes that have happened in the industry have actually been beneficial and could better prepare us for the next recession. "e industry is more prepared today than we were when the last recession happened, and that has its advantages and disadvantages. We're certainly more likely to have strong processes in place because of the enhanced auditing that we've gone through over the last few years." THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com.

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