Master servicers have been instrumental in dealing with the robosigning debacle in existing securitization deals, said participants at Information Management Network’s ABS East Conference on Sunday.
But more could be done by that segment of the industry to keep deal structures safe, said Aurora Bank FSB Senior Vice President Michele Olds, who led a panel Sunday called “Investors’ Rights in Default and Workout Scenarios.”
Olds went on to say to that for robosigning issues, master servicers have gone back and reviewed the process used for foreclosure, which is further reviewed with a loan level sample.
She added that the issue of robosigning has been blown out of proportion. “The people who sign the document aren’t the same people working the file, so the robosigning isn’t what is causing the problem. It’s the process after it.”
The the biggest job for master servicers in today’s environment is making sure that the added costs associated with robosigning aren’t passed onto the trustee in a securitization deal, Olds said. "We haven’t seen any evidence of that happening,” she said. “Today [servicers] are taking the hits themselves but we are watching it.”
Olds also believes that master servicers could be more of a watchdog for the trust but it is a matter of compensation and changing the deal structure to incorporate that added fee, which would not be easy to do from a legal perspective. “As a master servicer more could be done but the compensation is not there today,” she said. “We are only hitting the top of the line, the big ticket items.”