Compliance has been a major topic of interest, and in many cases a topic of concern, in the mortgage industry in the wake of post-crisis Wall Street reform legislation—notably the Dodd-Frank Act, which passed in July 2010.
Mortgage servicers and other stakeholders in the mortgages space are constantly looking to address their ongoing compliance needs. Many industry experts met on Monday afternoon to participate in the Compliance Lab at the 13th Annual Five Star Conference and Expo [1] in Dallas.
The Compliance Lab was directed by Daniel C. Chilton, Managing Attorney, Citigroup, and included such topics as the issues confronting the mortgage industry now and what the big challenges will be in the future, regulatory changes related to default requirements, systemic risk in the financial environment in which the mortgage industry operates, building and maintaining an effective compliance management program in the current regulatory environment, and an update from the Consumer Financial Protection Bureau on the latest mortgage servicing rules. The presentation on the latter topic was made by Laurie Maggiano, Program Manager for Servicing and Secondary Markets, CFPB.
“The last thing I remember reading about from Director (Richard) Cordray was that there is still a lot of room for improvement in mortgage servicing, especially on the technology side,” said Maria Moskver, General Counsel and Enterprise Compliance Officer with LenderLive. “I think more regulatory changes are going to come and, through these consent orders and settlements, there are going to be more changes that are required. The regulators are using UDAAP (Unfair and Deceptive Acts and Practices) as a methodology in terms of how to create change. So you’re not systematically imposing fees—you can’t blame it on your technology anymore. Now you’re going to have to go in and QC every single one of them. I think we’re going to get to a point where there is going to be even more compliance.”
On challenges that servicers have been facing in the last year since the previous Compliance Lab at the Five Star Conference, Bayview Loan Servicing COO Michael Waldron said, “The big ticket item is the amended servicing rules that have now come out and been finalized. They’ll be implemented in the Fall of 2017 and into the early Spring of 2018. What’s interesting about those is, I give credit to the Bureau for soliciting input from the industry and for their willingness to be responsive to some of the concerns that the industry has had since the January 2014 servicing rules came out.”
Waldron stated that many changes now come in the form of adjustments to existing systems and structures rather than large scale overhauls that the industry has seen in the past. These adjustments “oftentimes make things more difficult for the industry, quite frankly, oftentimes it creates clarity and creates efficiencies. It levels the playing field and can be, if done appropriately, can be empowering to the servicers themselves as well as to the consumers that we serve.”
Speakers at the lab, in addition to Waldron, Moskver, Chilton, and Maggiano, included Michael Barone of Mortgage Quality Management & Research, Myrtle Bowles-Scott of Texas Capital Bank, Edmond Buckley of Aspen Grove Solutions, Mitch Davison of MarketReady, Elizabeth DeSilva of Ditech, Roy Diaz of SHD Legal Group, Will Doby of PennyMac, Steven Frie of S&P Global Ratings, Michael Greenbaum of Safeguard Properties, Brian Montgomery of the Collingwood Group, Sasko Popovski of HSBC Bank USA, Katherine Qin of UT-Dallas, and Jim Vaca of Altisource.
Editor’s note: The Five Star Institute is the parent company of DS News and DSNews.com.