Reposted from 4.19.19 Urban Institute article:
“…some believe that the structure of servicing compensation must be changed to better align servicing costs and revenues for performing and nonperforming loans in a manner that will improve outcomes for servicers and consumers. Others believe that the present compensation model, coupled with postcrisis reforms and recommendations from the previous MSC briefs, can promote an efficient servicing market with minimal risk of disruption. Whether and what changes to the servicing compensation model might be needed is an open question. The MSC studied servicing compensation and examined three specific options: the status quo, a fee-for-service model, and a central default utility model.