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Regulatory Issues Take Center Stage at Five Star Conference

Events got underway Monday at the 2023 Five Star Conference & Expo in Dallas with the Legal League members, associate members, and mortgage industry professionals holding their semi-annual Legal League Fall Servicer Summit, a collaborative discussion covering the latest regulatory developments, landmark cases, and emerging issues within the housing and mortgage markets.

Presented by Partner Sponsor Bron, Inc., Five Star's Executive Director of Membership Gina Gallutia welcomed attendees to the event, and introduced Legal League Advisory Council Chair Stephen H. Hladik who recognized fellow Legal League members for their leadership before beginning the day's discussions.

Thomas Mason, Branch Chief-Supervisory Senior Account Executive for Ginnie Mae, served as Keynote Speaker for the Fall Servicer Summit. Mason shared experiences from his 30-plus years of experience in the financial/mortgage industry, including his time spent with Ginnie Mae, Fannie Mae, Freddie Mac, and SunTrust Mortgage.

"We are different the GSEs," said Mason. "When a borrower makes their loan, Ginnie Mae guarantees the payment on those levels of personal interest to the investor. We do this through a network of what we call our issuers. We really make homeownership affordable through our network partnerships that we have with mortgage insurers under the HUD umbrella."

For the past decade, Mason has been with Ginnie Mae, first as an Account Executive and Supervisor/Team Lead. In his current role, he serves as Branch Chief-Supervisory Senior Account Executive, leading a team of seasoned financial professionals that monitor and manage the activities of Ginnie Mae Issuers located in the Eastern region of the country. He works to assess the performance of Ginnie Mae’s assigned Issuers, and ensures they remain compliant with Ginnie Mae’s Guidelines.

"Issuers and our programs are able to get better pricing for their mortgage-backed securities," Mason continued. "This is a vast network that we have of investors that invest in these securities and make money flow into the system."

After a short networking break, Legal League held the first of several panel discussions, kicking off with the “Mortgage Servicing Litigation: Where It Is and Where It Is Going” panel. Moderated by Jane Bond, Managing Partner of McCalla Raymer Liebert Pierce LLC’s Florida Litigation Group, panelists included Mike Aiken, SVP and Associate General Counsel for Fay Financial, LLC; Hilary Bonial, Managing Director for Bonial & Associates, P.C.; Deloise Browne-Milner, Senior Operations Manager, Default Management, Foreclosure & Bankruptcy for Freddie Mac; Michael Merritt, SVP Mortgage Customer Care and Default Servicing for BOK Financial; and Paul Santi, Default Servicing Legal Manager with Flagstar.

The panel discussed the industry in the post-pandemic world, highlighting some of the most prevalent litigation issues of 2023. The panel provided their opinions and suggestions on loss mitigation options, future government funding and disbursement of funds from the HAF program, and the rise in litigation in the mortgage servicing space.

"There's been a tremendous amount of loss mitigation," said Bonial. "What I think is interesting is that the categories that we're seeing the increases in mitigation, and then the types of allegations with claims that are being made. The three areas we're seeing increases in, is bankruptcy. Under the bankruptcies in addition to the normal violation of states, we're also seeing borrowers were claiming that they were forced to file bankruptcy because they were not given sufficient consideration by the lenders."

The second panel discussion of the day, “Recent Mortgage Issues and Trends in Consumer Bankruptcy Cases,” featured moderator Jeffrey Fraser, Partner with Albertelli Law, hosting a panel including Abbey Dreher, Partner with BDF Law Group; Chapter 13 Trustee Mary Viegelahn; and Alicia Byrd, Senior Bankruptcy Manager with Flagstar Bank.

As the bankruptcy courts begin to return to normalcy in the post-pandemic world, panelists highlighted recent case law, an array of proposed rules/procedures, and other emerging issues and trends related to mortgage loans in consumer bankruptcy cases.

As the industry continues to make great strides in terms of diversity and inclusion, Legal League tackled key issues in that arena head on during a lively panel discussion titled, “Diversifying Legal Practice in Real Estate: Embracing Our Default Legal Expertise and Expanding to the Larger Real Estate Ecosystem.”

Moderated by Neil Sherman, President of Schneiderman & Sherman, PC, the panel featured Stavvy’s Chief Product Officer Shane Hartzler; Senior Partner Kent McPhail of McPhail Sanchez, LLC; and Michael Waldron, President of Compliability Solutions. The diversification panel keyed in on transitive properties of default professionals’ experiences to the legal areas of origination and real estate ancillary services. And as technology continues to evolve in the default servicing space, the panel discussed how to leverage advanced solutions, including artificial intelligence (AI), to remain competitive and provide superior client services.

After a short break, a panel led by Tony Van Ness, Founder/Managing Attorney with the Van Ness Law Firm, PLC titled “Foreclosure: Current Trends, Tactics, and Takeaways” was held. Van Ness, who also serves as Legal League Vice Chair, hosted panelists David Demers, Partner with the firm of Cooke Demers, LLC; Clayton Gordon, Director, Default Mediations and Litigation with Carrington Mortgage Services, LLC; and Melissa Black, First VP, Default Services with PennyMac Loan Services, LLC, and covered the current state of the foreclosure landscape. From changes within the servicer-attorney process, to current litigation trends around defense tactics and appellate decisions, the panel discussed concerns and challenges around the requirement updates in GSE foreclosures—before, during, and after a lawsuit.

Up next was the final panel discussion, “The Core of Diversity and Its Rewards,” moderated by Caren Castle, an Attorney with IDEA Law Group, PC. Panelists included an array of experts, including Toniqua Green, VP Corporate Social Responsibility with Mr. Cooper; Jose Morin, VP of Servicing with Stavvy; Michael Ruiz, Director of Supplier Diversity with Fannie Mae; Summer Smith, VP, D&I Programs and Consulting with Fannie Mae; and KimArie Yowell, Chief Learning Officer with Rocket Central and Chief Diversity Officer with Rocket Companies.

As many corporations begin to scale back from their investments in DEI (diversity, equity, and inclusion) in a contracting marketplace, ESG (Environmental, Social, and Governance) is still on the rise. With the Supreme Court having nullified Affirmative Action, the winds of DEI are shifting yet again. During the panel discussion, the group focused on what lies at the heart of DEI, why there is still work to be done in the DEI realm, and the benefits reaped by those companies that embrace DEI.

The panel events gave way to the exclusive “Fireside Chat on the Climate Change With the CFPB,” featuring Barrett Daffin Frappier Turner and Engel LLP Law Group's Partner Ryan Bourgeois hosting CFPB Financial Analyst Erik Rubinyi.

With the rise in natural disasters, primarily fires, floods, hurricanes, and drought, the impact on the housing space in impacted areas of the nation has been devastating. Bourgeois and Rubinyi discussed the effects of climate change on the housing market, and the long-lasting impact that will be felt by both consumers and lenders.

As Financial Analyst and Presidential Management Fellow in the CFPB’s Office of Mortgage Markets, Rubinyi monitors the mortgage market, specializing in the areas of climate risk, rental housing, and automated valuation models. He joined the CFPB in 2021, and previously worked with the Treasury’s Office of International Affairs on international climate finance and for Treasury’s CDFI Fund.

The day closed out with a recap of the day’s events and a discussion of what lies ahead for Legal League, as Bourgeois welcomed Victoria Garcia DeLuca, VP of Marketplace Diversity Strategy with Guild Mortgage, to the stage. Garcia DeLuca leads Guild Mortgage’s long-term initiatives, promoting minority homeownership and sustaining DEI in lending. Her responsibilities include the recruiting and retention of minority loan officers, developing new products for minority markets, and serving as a liaison with the GSEs. She leads Guild’s participation in the National Association of Hispanic Real Estate Professionals (NAHREP) and the National Association of Minority Mortgage Bankers of America. She also serves on NAHREP’S Corporate Board of Governors, and represents Guild with the MBA’s “Home for All Pledge,” the industry’s long-term commitment to addressing racial inequities in housing.

For more information on the 2023 Five Star Conference & Expo, click here.

About Author: David Wharton

David Wharton, Editor-in-Chief at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has nearly 20 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. He can be reached at [email protected].

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