The issue of reducing minimum mortgage servicing fees to 12.5 basis points from 25 basis points is back in the spotlight again. After failing to gain full industry support - some servicers launched a marketing effort lobbying for this change over the summer of 2003 - analysts are suggesting that there is more of a market consensus for lower servicing fees.

"Although it is still going to be a challenge for the agencies to build an industry consensus on this issue, our impression is that there is much more momentum behind the effort this time with the majority of large servicers that we have spoken to supporting the change," noted Bear Stearns researchers in a recent report.

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