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Katherine Porter’s California Monitor Report – A Review of HBOR Legislation


On September 30, 2014, Katherine Porter, a UCI Professor who also serves as the California Monitor overseeing the HBOR legislation, released her highly anticipated report aconcerning the HBOR legislation.  In her report, Ms. Porter concludes that mortgage servicing has improved because of the National Mortgage Settlement, but lawmakers must look at reforming their own approaches to regulating the industry.  Ms. Porter also calls on servicers to make significant technology investments to improve communication between servicers and borrowers.

The report examines the last few years of government efforts to help struggling homeowners, most notably the National Mortgage Settlement, the Consumer Financial Protection Bureau’s mortgage servicing rules, and state laws called “Homeowner Bills of Rights.”  The report analyzes how many recent reforms have replicated past strategies from the National Mortgage Settlement without examination of their effectiveness. For example, as a result of a new rule requiring more information in loan modification denial letters, homeowners receive notifications up to 20 pages long with very technical language, rather than customized and clear explanations.

Drawing on her two-and-a-half years as Monitor, the report is replete with examples of the ongoing challenges in mortgage servicing. Porter concludes that simply adding more regulations may create confusion and operational burdens. She advocates for novel approaches, including an industry-wide platform for default servicing and consumer testing to ensure effective communication.

Read the full report here:  Reclaiming The Rules: Solutions For Mortgage Servicing

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