U.S. Department of Agriculture: Centralized Servicing for FmHA Single-family Housing Loans : Report to Congressional Requesters

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Page 17 - David Osborne and Ted Gaebler, Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector (Reading, Mass.: Addison-Wesley, 1992).
Page 17 - Allowing the public and private sectors to compete for centralized servicing of the 690,000 borrowers currently serviced locally will fundamentally change the way FmHA does business. It also could mean reaping the benefits of the competitive marketplace — greater efficiency, increased focus on customer needs, increased innovation, and improved morale. For example, while FmHA has unsuccessfully attempted to develop an escrow accounting system for the loans it services, a private company has established...
Page 8 - ... Servicing these single-family housing loans accounts for about 35 percent of the work load in FmHA's county offices. An additional 90,000 loans are administered by a loan servicing company from a central location. These loans were sold in 1987 as part of the Omnibus Budget Reconciliation Act of 1986. The private sector has used centralized servicing of housing loans for many years. Under centralized servicing, an individual who wishes to buy a home obtains a loan from a lending institution. After...
Page 8 - ... behalf. One option to reduce RHCDS administrative costs would be to expand in house RHCDS centralized servicing and reduce servicing in county offices. RHCDS borrowers could still obtain loans under current arrangements, but loan servicing would be performed at a separate, central location. Borrowers would receive the same services provided by the private sector loan servicing industry by phone or mail — as well as services unique to RHCDS, such as periodic review of interest credit agreements,...
Page 1 - ... corresponding restructuring is now needed. Once developed, the mission statement must be continually reassessed and updated to address changing conditions. In the days of personal computers, fax machines, and 700-pluspage farm bills, USDA needs to be fundamentally restructured, reinvented if you will, in the context of the newer management concepts that guide private sector corporations, state governments, and governments in other countries. The new management concepts emphasize flexibility,...
Page 8 - ... a lending institution. After the loan is closed, the lending institution often sells the servicing rights to another organization. It is this centralized servicing organization that collects monthly payments, establishes escrows for property taxes and insurance, manages delinquencies, and provides credit counseling. The borrower communicates with the servicing organization over the telephone or through the mail. FmHA's in-house centralized servicing for FmHA borrowers would work in much the sane...
Page 17 - ... better and costs less. We propose a different approach. We must make cuts where necessary; we also must make our government effective and efficient. Some programs clearly should be eliminated, others streamlined. We will offer many proposals to do both in chapter 4. But reinventing government isn't just about trimming programs; it's about fundamentally changing the way government does business. By forcing public agencies to compete for their customers—between offices, with other agencies, and...
Page 2 - FmHA's county offices that have more than 75 percent of their loans in single-family housing. With centralized servicing, these offices could be studied for possible consolidation or closure. Other benefits of centralized servicing...
Page 17 - At least to some extent, the option selected depends on ones's view of the role of the government and whether it can carry out and should be carrying out functions the private sector can do. Although this is an age-old debate, recent literature and efforts by the administration's National Performance Review team have emphasized the benefits of private sector...
Page 17 - Without a system comparable to the one developed by private industry, FmHA would not be competitive. Yet, the literature states that once forced to compete, government employees enjoy the challenge of competition if job security is not at stake.

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