Private Lender by AAPL

Page 58


Up-to-Date Technology Will Help Keep CFPB Happy by Elizabeth Morales


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outdated technology and poor follow-up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outdated technology,” CFPB Director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