This article originally appeared in the March 2025 edition of MortgagePoint magazine, online now.
Stephen M. Hladik serves as Chair of Legal League, and is a Partner at Hladik, Onorato & Federman LLP. Formerly a Deputy Attorney General in charge of the Harrisburg office of the Pennsylvania Bureau of Consumer Protection, Hladik brings a range of experience to his mortgage foreclosure; bankruptcy; tax sale; and Unfair, Deceptive, and Abusive Practices (UDAP) legal practice. A graduate of the Pennsylvania State University, he obtained his law degree from Widener University, with honors, where he served as Internal Managing Editor of the Law Review. He gained significant expertise in lending law enforcement while serving in the Pennsylvania Attorney General’s Bureau of Consumer Protection, handling UDAP, Fair Debt Collection Practices Act (FDCPA), Real Estate Settlement Procedures Act (RESPA), and Truth in Lending Act (TILA) cases.
Jane Bond serves as Vice Chair of Legal League, and is a Managing Partner at McCalla Raymer Leibert Pierce LLC in the firm’s Florida Litigation Group. She has more than 30 years of litigation experience, with 27 years specifically devoted to business and real estate litigation involving the mortgage lending and servicing industries. Her experience has landed her several speaking engagements at training seminars, conferences, and continuing legal education courses on real property issues.
In this month’s edition of MortgagePoint, both industry experts highlight Legal League’s achievements in 2024, what’s to come in 2025, priorities moving forward, and where they would like to see Legal League in the future. Each offers their opinions on recent government and policy shifts, ways in which they will impact the real estate market, and how shifting economic conditions and new regulatory developments could affect U.S. borrowers, and growing membership in the group.
Q: What were some of the key accomplishments of Legal League in 2024?
Hladik: Legal League was very active in 2024. The League hosted a successful and well-attended Spring Summit and a Servicer Leadership Summit in the Fall at the Five Star Conference. The Webinar Committee put together terrific programs throughout the year, and the Publications Committee issued four well-written editions of the Legal League Quarterly. The League’s Strategic Initiatives Working Group (SIWG) put together several White Papers on important industry topics, as well as informative webinars. We also witnessed growth in membership. The League was a vocal advocate for the mortgage servicing industry by actively participating in important industry issues by authoring an Amicus Brief in a significant appellate case, and commenting on proposed regulations. The League hosted many Certification Courses, lending its members’ expertise in teaching courses to industry employees.
Bond: In 2024, Legal League’s major accomplishment was fostering industry unity and camaraderie. We achieved this through a series of impactful conferences, engaging webinars, on-site servicer training sessions, servicer certification courses, and our regular publications. These initiatives not only brought the industry together, but also provided valuable learning and networking opportunities for all participants.
Q: What are your priorities for Legal League in 2025?
Hladik: Our priorities include growth in membership, continuing to provide high-quality educational webinars, top-level Summits and networking activities, and being a vocal advocate for the mortgage servicing industry.
Bond: In 2025, our priorities for the Legal League are centered around fostering active participation and engagement from all member firms. We aim to see each member firm join our committees, attend our events, submit articles for our publications, and fully enjoy the many benefits of being part of Legal League.
By being an active participant, each member brings unique qualities that enhance our collective strength. This involvement not only provides valuable marketing opportunities and increased visibility within our industry, but also facilitates direct interaction with mortgage servicers, the GSEs, agencies, vendors, and fellow law firm members. Together, we can continue to build a vibrant, connected, and thriving community.
Q: Where do you see Legal League in five years?
Hladik: I would like to see Legal League as the “go to” source for information, education, and networking activities.
Bond: Loss mitigation programs are currently at an all-time high, and with natural disasters driving insurance costs to unprecedented levels in some states, many borrowers are finding it increasingly difficult to keep up with their mortgage payments. In response, both federal and state governments are actively exploring creative solutions to help homeowners stay in their homes.
These efforts include new regulatory updates and innovative policies aimed at providing more flexible and effective support for borrowers facing financial hardships. By the industry addressing these challenges head-on, the goal is to offer improved assistance, and to ensure that more families can maintain homeownership during these trying times.
Q: Insurance issues are hot right now. Can you share any insight on how this will impact loss mitigation programs?
Hladik: Insurance issues are going to be a driver in payment difficulties for borrowers. With insurance rates on the rise due to numerous natural disasters, this is going to cause borrowers’ payments to increase dramatically. Loss mitigation will be a valuable tool in assisting borrowers, but mortgage servicers do not have control over the extent of increases in taxes and insurance.
Bond: Loss mitigation programs are currently at an all-time high, and with natural disasters driving insurance costs to unprecedented levels in some states, many borrowers are finding it increasingly difficult to keep up with their mortgage payments. In response, both federal and state governments are actively exploring creative solutions to help homeowners stay in their homes.
These efforts include new regulatory updates and innovative policies aimed at providing more flexible and effective support for borrowers facing financial hardships. By the industry addressing these challenges head-on, the goal is to offer better assistance and ensure that more families can maintain their homeownership during these trying times.
Q: Regarding certain loss mitigation programs winding down, what will the impact of these deadlines be on consumers?
Hladik: These loss mitigation programs have been valuable in helping borrowers stay in their homes, and the absence of such relief is going to have a significant impact on borrowers.
Q: Are there any upcoming regulatory changes or policy shifts that could significantly impact the real estate market?
Hladik: With daily change coming from Washington, D.C., there could be impacts on the market. It appears that regulation and enforcement will be decreasing. Inflation and interest rates are going to be a key factor in impacting the real estate market, and policy changes in Washington may have an impact on increases in inflation.
Q: With the most recent changes surrounding the CFPB, what are some pros and cons to a change in governance?
Hladik: While enforcement or regulation may be declining for now, servicers would be wise to maintain regulatory compliance standards that they have been following. On the one hand, less enforcement actions by the CFPB may result in decreased costs in defending investigations and legal actions on the federal level, as well as smaller penalties. On the other hand, state attorneys general are sure to fill any perceived void, and that may be a more costly event for the mortgage community, as defense would now be on multiple fronts in multiple jurisdictions.
Q: Moving forward, what is your personal forecast for Q4 of 2025?
Hladik: While I am no economist or expert in the world of prognostication, I believe that significant increases in taxes and insurance are going to strain borrowers and lead to more defaults, resulting in a higher rate of foreclosures.
With the current levels of debt in this country, the decrease in the savings amounts, and increases in defaults on unsecured lending and auto loans, any uptick in unemployment could result in a higher default rate. Homeowners still have significant equity in homes, but prolonged defaults could eat away at that amount quickly.
Q: How do you foresee changes in default servicing evolving over the next few years, especially with shifting economic conditions and regulatory developments?
Hladik: A key evolution in default servicing will involve the utilization of technology and artificial intelligence (AI) to make processes more efficient and the borrower experience better.
Bond: Over the next few years, default servicing is expected to evolve significantly due to shifting economic conditions and regulatory developments. Economic fluctuation, including inflation and potential recession risks, will require more proactive risk management and tailored solutions for borrowers. Regulatory updates, such as the CFPB’s proposed amendments to Regulation X, will necessitate process updates and enhanced communication practices. Additionally, technological advancements will drive automation and streamlined communication, helping servicers manage risks more effectively and support borrowers better. By staying adaptable and proactive, servicers can navigate the evolving landscape successfully.
Q: What do you foresee for default rates this year?
Hladik: As noted, there are factors present that could lead to higher default rates this year.
Bond: The default rates should remain steady due to the many loss mitigation options and the anticipated rate cuts. Borrowers continue to have a large amount of equity in their homes giving them more options when facing financial difficulty.
Q: How are emerging technologies, like AI and blockchain, influencing the servicing and default management spaces, and what should the industry expect in terms of innovation?
Hladik: Innovation and creativity in the use of AI and technology will be important going forward as the industry continues to find ways to be more efficient, uphold compliance standards, and maintain peak quality control.
Bond: Emerging technologies like AI and blockchain are transforming mortgage servicing and default management by enhancing communication among borrowers, law firms, investors, and vendors. These technologies reduce servicing costs, improve efficiency, and ensure regulatory compliance. By automating routine tasks and providing secure, transparent records, AI and blockchain make the mortgage process more efficient, cost-effective, and reliable.
