Despite recent efforts from a number of federal regulators to control the mortgage industry, McClatchy and Tribune Newspapers report that the market still needs a lot of work to make it a healthy lending environment for consumers.
According to the news source, although lending regulation has been passed as part of the Dodd-Frank Consumer Protection Act through agencies such as the Consumer Financial Protection Bureau, thus far, the changes have been "slow and painful."
Specifically, high fees, misconducted borrower accounts, overlooked paperwork and wrongful foreclosures are all problems that will continue to weigh heavily on the mortgage industry, despite initiatives to eliminate them, the source notes
Meanwhile, critics blame mortgage servicers for what has been an obstacle-filled path on the way to restructuring the industry.
"They're a huge, inefficient, bureaucratic ship that doesn't operate well, and it's not going to turn itself around quickly," Legal Assistance Foundation in Chicago supervisory attorney Daniel Lindsey told the news source. "Just the day in, day out pulling of teeth you have to do (with servicers) is mind-numbing."
Even streamlined government initiatives, including the Home Affordable Refinance Program and Home Affordable Modification Program, meant to make it simple for underwater borrowers to restructure their home loans into more favorable terms have a sluggish process, the news outlet says.
However, even though the pace of the real estate recovery and mortgage industry reformation has a slow pace, other advocates say the overall environment is much healthier that it was in the years just after the housing market's collapse.
"There are still mistakes being made, but it pales in comparison to what this environment was like in the early part of this housing crisis," said Mortgage Bankers Association CEO David Stevens. "I think we are clearly on the precipice of that changing."
Recent events, such as the the multibillion-dollar mortgage settlement reached between the nation's largest mortgage lenders and a number of state attorneys general offices on behalf of homeowners wrongfully foreclosed upon, is just one example of conditions starting to improve. Stevens even went as far as to call this outcome "extraordinary."
Additionally, industry analysts continue to weigh the pros and cons of the implementation of principal mortgage reductions. If this option becomes available to homeowners who are currently saddled with negative equity, it could help eliminate many mortgage delinquencies and foreclosures in the future.