Even as the dual market has expanded access to capital to families that historically have been shut out of the mortgage market, it has also prompted some CBOs to rethink their role in the marketplace. Following a discussion of the changing structure of the mortgage industry, this paper examines how a small number of CBOs have responded to change by restructuring existing operations and by initiating new programs and activities. In particular, some CBOs have altered their advocacy efforts to expand access to mortgage capital by lower-income people and communities. Others have restructured their community lending programs by partnering with private sector mortgage companies to establish new automated mortgage lending or loan servicing operations, or by creating their own state of the art mortgage lending and servicing systems. Still other approaches just now in their early stage of development - including efforts to combat abusive lending practices, increase the effectiveness of homeownership counseling or expand foreclosure avoidance initiatives - also hold much promise.

Unfortunately, most community groups have not fully digested the enormity of the changes that have occurred in the mortgage banking industry and have failed to make the needed  adjustments. For example, even as private sector lenders are increasingly selling off servicing rights to a handful of mortgage servicing giants, only a relatively few CBOs now outsource their loan servicing operations. This not only prevents small scale CBOs from gaining access to state of the art servicing technology, but also diverts resources and management capacity from away from those activities where the CBO's presence in the community give them a strong comparative advantage over their private sector counterparts. Recognizing the fact that many CBOs continue to do business as they have for decades, the final sections of this paper also examine factors that limit the willingness and ability of CBOs to adapt to the changing market environment.