TECHNOLOGY
Up-to-Date Technology Will Help Keep CFPB Happy by Elizabeth Morales
A
ll lenders want to stay on the
regulatory actions; findings from their
what additional documents and
good side of the Consumer
prior examinations; servicing transfer
information are needed, along with
Financial Protection Bureau,
activity; the number, severity and
a reasonable date to submit it. Also,
particularly in light of the agency’s
trends of consumer complaints; as well
servicers must now foreclose on the
recent criticism of mortgage servicers.
as input from housing counselors and
date they have specified and not a
How best to do that?
other stakeholders about institutional
few days before, as examiners found
performance based on their experience.
in many cases of deceptive practices.
First, give great customer service. Second, stop using your hands and
What does that mean? Because so
Some servicers failed to convert
toes to count money. Yes, the CFPB
many homes went into foreclosure as
trial modifications to permanent
recently released a 21-page qualitative
the servicers didn’t properly notify the
modifications after borrowers
and quantitative report, a study from
borrowers of the foreclosure process
had successfully completed trial
January 2014 to April 2016, in which
and deadlines, servicers must now
modifications, resulting in their owing
it criticized mortgage services, their
notify the borrowers in writing within
higher amounts of accrued interest.
outdated technology and poor follow-up
five days to acknowledge receipt
with borrowers.
of the loss mitigation application
Yes, but as quoted in The Wall Street
“Mortgage servicers can’t hide
Can I use Excel to service my loans?
and whether it is complete. The
Journal and Forbes, most recently, “88
behind their bad computer systems or
loss mitigation application must be
percent of spreadsheets have errors.”
outdated technology,” CFPB Director
received at least 45 days before a
Do you remember the JP Morgan Chase
Richard Cordray said in a press release.
foreclosure sale. If incomplete, the
“London Whale” incident, Barclays
“Mortgage servicers and their service
servicer must send a letter stating
offer to buy Lehman Brothers and the
providers must step up and make the investments necessary to do their jobs properly and legally.” The examiners found that other than deficient technology, “several mortgage servicers lack proper training, testing and auditing of their computer systems and software platforms and those of their service providers.” So what exactly did they look at in each servicer? Several things: the strength of compliance management systems; the existence of other
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