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OFFICIAL PUBLICATION OF THE AMERICAN LEGAL & FINANCIAL NETWORK VOI. II / ISSUE IV

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MILLENNIALS PAGE 22

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WORK+LIFE PAGE 26

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TECHNOLOGY PAGE 16


The year’s biggest advovcacy event for creditor’s rights. Alfn members walk the walk (literally, in the halls of Congress). After six years working the Hill and financial services regulators, it’s no surprise that the ALFN has the mortgage servicing industry’s most rigorous, far-reaching and impactful grass roots advocacy program.

Culminating each spring, the ALFN advovacy effort includes educational webinars, publications, digital updates, and of course, ALFN Advocacy Day. Technically a day and a half, the event offers education specifically focused on regulatory and legislative issues affecting creditors rights practitioners in the mortgage servicing, bankruptcy and unsecured credit collections industries.

Meeting with your elected officials is a serious responsibility and the highlight of the ALFN Advocacy Day schedule.

Over the last two years the ALFN has coordinated and participated in over 200 meetings with members of Congress and financial services regulators. Those face-to-face meetings are the single biggest asset we have as an industry to affect change, explain our positions and needs, and advise members of Congress and their staff on how best to proceed with new, responsible legislation that protects practitioners and consumers, and how more robust Congressional oversight of industry regulators is both needed and necessary for healthy, viable industries and businesses.

SAVE THE DATE: APRIL 18-19, 2016 WESTIN GEORGETOWN WASHINGTON, D.C.

Past participants include:

Consumer Financial Protection Bureau (CFPB) Federal Housing Finance Agency (FHFA) United States Senate United States House of Representatives Honorable Brian Montgomery Meg Burns (FHA, FHFA, Collingwood Group) Congresswoman Ann Wagner Congresswoman Nancy Johnson Congressman Steve Stivers National Association of Retail Collection Attorneys American Society of Association Executives United Trustee Association Mortgage Bankers Association Women Impacting Public Policy The Collingwood Group The Beckles Collective REOMAC

Sponsor or get involved:

Cade Holleman, M.A. Vice President, Government Affairs & Communications American Legal & Financial Network (ALFN) cholleman@alfn.org | (714) 679-2514 alfn.org | alfnevents.org


Who’s counting? We do, sometimes.

The number of face-to-face meetings the alfn has coordinated and participated in with members of Congress, their staff and regulators over the last two years. REGISTRATION OPENS DECEMBER 2015


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welcome BOLD PERSPECTIVES FROM UNIQUE ANGLES The ALFN has had a remarkable year thanks to your support, and we continue to be a leading force in representing, defending and educating America’s mortgage servicing industry. 2016 will be no different, and we plan to continue breaking the mold and bringing you new and exciting opportunities to not only help grow your businesses, but help you grow as industry leaders and business professionals. As we look forward to 2016, we focus this issue on industry trends with contributions from our young professionals group (JPEG). Hear from some of our young industry leaders on what we should anticipate in 2016 and beyond, including challenges behind service released loans, statute of limitations, judgement of foreclosure and the continued use of affidavits, and the importance of reviewing your processes and procedures during this time in our industry when default rates have seemingly normalized. We also take a closer look at Millennials, as they have become our nation’s largest living generation, and what does the future of the housing market look like for them. In this same vein, we consider the importance of work-life balance as it continues to be something that young professionals find very important in their careers. We look at young female professionals and explore if raising a family is still a concern for those looking to climb the corporate ladder, and the challenges this might present for them. In addition this issue will explore a new industry trend as it relates to cloud-based case management systems, and the benefits of utilizing the cloud for servicers and law firms. Learn about the Alabama right of redemption changes, and the California Home Owners Bill of Rights, including when a borrower is entitled to attorneys’ fees after enjoining a foreclosure sale. Take time to review our insert on volunteer opportunities with the ALFN, and make sure you get plugged in for 2016. Save the date for our 2016 events, including Advocacy Day (April 18-19), our newest event willpower (April 18) and ANSWERS (July 16-19). The Board of Directors and Executive Team would like to thank each and every one of you for your support and confidence during 2015 and we look forward to living up to your expectations and earning your support in 2016. As always, this is your organization and we want to hear from you regarding anything that you want to discuss or suggest. Please feel free to contact any Board or Executive Team member that is convenient for you.

MATT BARTEL PRESIDENT & CEO, ALFN


alfn angle: in this issue

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FROM THE PRESIDENT

6

A-BRIEFING

President & CEO Matt Bartel introduces this issue of the ANGLE

Miss a Legal Update or Webinar details? Find a brief synopsis here.

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SPOTLIGHT: THE ALFN TEAM

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STATE SNAPSHOT: APPELLATE WINS IN IL

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ON THE BOOKS: CALIFORNIA

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MEMBERS ON THE MOVE

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MAX YOUR MEMBERSHIP

Meet your ALFN Executive Team and Staff Update on the Homeowner Bill of Rights & Attorneys Fees Update on the Homeowner Bill of Rights & Attorneys Fees Updates on ALFN members’ services and staffing Membership infograph shows where to focus your efforts

features & contributions

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Q&ALFN

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TREND: TECHNOLOGY

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TREND: MILLENNIALS

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COVER STORY: WORK + LIFE BALANCE

ALFN JPEG Members Discuss Industry Trends assure360’s Adam Hansen discusses cloud technology Mackie Wolf ’s JP Sellers looks at challenges facing millennials Melissa Sgroi examines work + life balance for young profesionals

PUBLISHER

American Legal & Financial Network (ALFN) 12400 Olive Blvd., STE 555 St. Louis, MO 63141 636-257-4500 (phone) 636-216-0050 (fax) www.alfn.org

EDITOR

Cade Holleman, M.A. VP, Government Affairs & Communications cholleman@alfn.org

EDITORIAL BOARD

Adam Wilde, Esq. | Codilis & Associates C. Tony Crnic, Esq. | Klatt Law Erica Fujimoto | Affinity Consulting Brian McGrath | ProVest

EDITORIAL OPPORTUNITIES

Cade Holleman, M.A. VP, Government Affairs & Communications cholleman@alfn.org

ADVERTISING OPPORTUNITIES

Liz Potter SVP, Business Development & Member Relations lpotter@alfn.org

REPRINT PERMISSION

Ashleigh Bouselli Administrative & Event Coordinator abouselli@alfn.org

ALFN ANGLE

Vol. 2 / Issue 3 / Summer 2015 The ALFN ANGLE is a quarterly digital magazine published by the American Legal & Financial Network (ALFN) on behalf of its attorney/trustee, associate, and mortgage servicing members. Reprint permission is available by request. To contribute or advertise, please contact the ALFN directly.


What matters to half the industry, matters to us. When everyone else won’t have real conversations that matter, alfn will. #willpower It really is true: where there’s a will, there’s a way. Women in Legal Leadership (WILL) is an idea that resonates far and wide in today’s mortgage servicing industry, where more women lead today than ever before.

Join us for the inaugural Women in Legal Leadership summit, willpower, this spring in Washington, D.C. Built in conjunction with the ALFN’s annual legislative and regulatory policy summit, but designed with the education, networking, mentoring and leadership training that women need today to be better leaders, practitioners and partners. Join us for keynotes from women leaders in government and the industry, women who have cracked glass ceilings, made it to the C-Suite, and built thier own firms from the ground up. When no one else is willing to have real conversations that matter to half the industry, ALFN WILL. Will you join us?

Take advantage of the two-for-one structure with Advocacy Day. Willpower attendees can maximize their time in Washington, D.C. but participating in the ALFN’s annual legislative and regulatory policy summit, Advocacy Day, that begins immediately following willpower. Network with other practitioners during the evening’s WILL-sponsored networking mixer, learn about the ALFN’s PAC, AMPAC, that is driving a deeper dialogue and helping the ALFN build more meaningful relationships with Congressional leaders, and most importantly, visit with your elected officials during our afternoon Hill visits. The issues facing women in the mortgage servicing industry go hand-in-hand with our focus on creating an equitable, viable, and sustainable industry that offers everyone a chance for success.

Planned participants include:

Office of Minority & Women Inclusion, Consumer FInancial Protection Bureau (CFPB) Office of Minority & Women Inclusion, Federal Housing Finance Agency (FHFA) United States Senate United States House of Representatives Congresswoman Ann Wagner National Association of Retail Collections Attorneys (NARCA) American Society for Association Executives (ASAE) Women Impacting Public Policy (WIPP) American Bar Association (ABA) Ellevate Network The Beckles Collective

SAVE THE DATE: APRIL 18, 2016 WESTIN GEORGETOWN WASHINGTON, D.C.

WILLPOWER

Liz Potter, M.B.A. Senior Vice President, Business Development & Member Relations American Legal & Financial Network (ALFN) lpotter@alfn.org | (513) 257-9948 alfn.org | alfnevents.org


women. washington. willpower. watch out.

APRIL 18, 2016 ALFNEVENTS.ORG REGISTRATION OPENS DECEMBER 2015


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EVENTS TEACH DALLAS

Join us for the 2015 TEACH Dallas, scheduled for November 12, 2015. The southwest regional servicer training will be held at the Dallas Marriott Las Colinas. Registration is now open at ALFNEVENTS.org

2016 SAVE THE DATES ADVOCACY DAY

ALFN members will return to Washington, D.C. for the association’s annual legislative & regulatory policy summit held April 18-19, 2016 at the Westin Georgetown.

#WILLPOWER

ALFN’s newest member-based group, Women in Legal Leadership (WILL), will host its inaugural summit April 18, 2016 in Washington, D.C. at the Georgetown Westin in conjunction with ADV16.

ANSWERS

Save the date for ANSWERS 2016: July 17-20 at the Omni Grove Park Inn in Asheville, North Carolina. Registration opens early 2016.

ALFN LEGAL UPDATES TEXAS

On July 21, 2015 the ALFN published a Legal Update on HB 2067 relating to the rescission of non-judicial foreclosure sales which was signed by the Governor and made immediately effective. The update was provided by the attorneys of Codilis & Stawiarski, P.C. an ALFN member in Texas.

ILLINOIS

On July 28, 2015 the ALFN published a Legal Update on IL HB 2814 which amended the IL Residential Mortgage License Act of 1987 and was enacted and made into law by the Governor on July 23, 2015. The update was provided by Amanda V. Green, Esq., Shapiro Kreisman & Associates, LLC an ALFN member in Illinois.

NEW HAMPSHIRE

On August 4, 2015 the ALFN published a Legal Update on an amendment to New Hampshire SB 50 namely RSA 479:25 which alters the original SB50 which governs the statutory power of sale. The update was provided Joseph Camillo, Esq., of Shectman Halperin Savage, LLP, an ALFN member in Massachussetts.

SOUTH CAROLINA

On August 11, 2015 the ALFN published a Legal Update on a new appellate ruling reaffirming the state’s monetary shutdown penalty when lender-servicers fail to timely satisfy mortgages at the county courthouse following a payoff. The update was provided by John J. Hearn, Esq., Rogers Townsend & Thomas, PC an ALFN member in North Carolina & South Carolina.

ILLINOIS

On August 19, 2015 the ALFN published a Legal Update on an Appellate court clarification made in the case Citimortgage, Inc. v. Hoeft on the issue raised by borrowers attacking the sufficiency of acceleration letters sent by lenders. The update was provided by Blake A. Strautins, Esq., Kluever & Platt, LLC an ALFN member in Illinois.

NORTH CAROLINA

On August 21, 2015 the ALFN published a Legal Update on a Session Law 2015-178, HB 174, a bill that changes protections provided to tenants during a non-judicial foreclosure and eviction. The update was provided by John P. Fetner, Esq., Rogers Townsend & Thomas, PC an ALFN member in North Carolina & South Carolina.

ILLINOIS

On August 25, 2015 the ALFN published a Legal Update on an Elder Foreclosure calendar for cases where defendants are age 65 or over in Cook County. The

update was provided by Pierce & Associates, P.C. an ALFN member in Illinois.

ILLINOIS

On August 25, 2015 the ALFN published a Legal Update regarding judicial modifications with respect to Affidavits of Indebtedness (“AOI”) where there was a prior servicer. The update was provided by Pierce & Associates, P.C. an ALFN member in Illinois.

ILLINOIS

On August 26, 2015 the ALFN published a Legal Update on the Appellate Court decision in BMO Harris Bank, N.A. v. Wolverine Properties, where the court held that a servicer cannot seek a deficiency judgment for pre-foreclosure judgment tax disbursements unless those amounts are included in the judgment of foreclosure and sale. The update was provided by Emily L. Mallor, Esq. Kluever and Platt, LLC an ALFN member in Illinois.

ILLINOIS

On August 26, 2015 the ALFN published a Legal Update on the decision in U.S. Bank, N.A. v. Klosterman, in which Defendant’s appealed from the trial court’s ruling which dismissed the Defendant’s affirmative defenses. The Appellate Court granted summary judgment in Plaintiff’s favor. The update was provided by Emily L. Mallor, Esq. Kluever and Platt, LLC an ALFN member in Illinois.

ILLINOIS

On September 2, 2015 the ALFN published a Legal Update on SB 1487 signed into law on August 21, 2015 and becoming effective on January 1, 2016. The law should protect the Plaintiff and its attorneys by preventing filing of some “maritime” and other internet style liens against the property. The update was provided by Matt Abad, Esq. Kluever and Platt, LLC an ALFN member in Illinois.


MINI RECAPS OF RECENT ALFN UPDATES ILLINOIS

On September 9, 2015 the ALFN published a Legal Update on the case of United Central Bank v. KMWC 845, LLC, noting that the Appellate Court affirmed the District Court’s decision citing the Illinois single refiling rule. Citing that if the Plaintiff is barred from proceeding on an action based upon the underlying note, then the Plaintiff may not proceed on an action based on the mortgage. The update was provided

ILLINOIS

On September 29, 2015 the ALFN published a Legal Update regarding the ruling of Judge Downs in Kane County, Illinois, that absent a subsequent amendment to the judgment of foreclosure order, fees, costs, advances, and disbursements expended by Plaintiff between the date of execution of the affidavit of indebtedness and the entry of the judgment of foreclosure cannot be recouped at confirmation of sale. The update was provided by Pierce & Associates, P.C. an ALFN member in Illinois.

ILLINOIS

On October 1, 2015 the ALFN published a Legal Update regarding a new Illinois Department of Financial and Professional Regulation consumer hotline number for the Grace Period Notice. The State claims that they changed the consumer hotline number for the Grace Period Notice on July 17, 2015 to 1-844768-1713. The update was provided by Pierce & Associates, P.C. an ALFN member in Illinois.

ILLINOIS

On October 6, 2015 the ALFN published a Legal Update regarding the ruling of Financial Freedom Acquisition, LLC v. Standard Bank and Trust Co., the Supreme Court of Illinois ruled that a trustee, as a mortgagor of a reverse mortgage, was a consumer entitled to receive Truth in Lending Act ("TILA") dis-

closures, despite the fact that a reverse mortgage creates no financial obligation on the part of the mortgagor. The update was provided by Pierce & Associates, P.C. an ALFN member in Illinois.

cy Managing Attorney, Gladstone Law Group; Nicole Noel, Esq., Associate, Kass Shuler, PA.

MEMBER WEBINAR

On October 7, 2015 the ALFN published a Legal Update regarding an Appellate Court opinion that simple production of an original promissory note, endorsed in blank, was sufficient proof the petitioner was holder of the debt. The update was provided by Shapiro & Ingle, LLP an ALFN member in North Carolina.

On August 25, 2015, the ALFN hosted a Member Webinar titled, “Preventing Risks Arising from Communications with the Borrower”. The Webinar was provided by Eric Dean, Esq., Vice Chair of the Commercial & Real Estate Practice Group, The Wolf Firm, ALC; Jonathan Zak, Esq., Partner, Wright, Finlay & Zak, LLP; Bret Allen, Esq., Attorney, Angel L. Reyes and Associates, PC.

ILLINOIS

MEMBER WEBINAR

NORTH CAROLINA

On October 19, 2015 the ALFN published a Legal Update regarding a recent appeal handled by member firm Codilis & Associates, P.C., where the Appellate Court found that all requirements for a deficiency judgment were present in this case at the trial lever, and that the trial court’s insistence on further documentation was contrary to statute. The update was provided by Codilis & Associates, P.C. an ALFN member in Illinois.

ILLINOIS

On October 22, 2015 the ALFN published a Legal Update regarding the Tenant Information Disclosure Form, required by Chicago’s Protecting Tenants in Foreclosed Rental Property Ordinance, is now available in Spanish, Polish and Chinese on the city’s website. The update was provided by Pierce & Associates, P.C. an ALFN member in Illinois.

ALFN MEMBER WEBINARS MEMBER WEBINAR

On August 20, 2015 the ALFN hosted a Member Webinar titled “What You Didn’t Hear at ANSWERS – Rule 3002.1”. The Webinar was provided by Kristin Zilberstein, Esq., Senior Associate, McCarthy Holthus, LLP; Shirley Palumbo, Esq., PR District Court Foreclosures, Bankrupt-

On October 7 , 2015 the ALFN hosted an ALFN Bankruptcy Group Webinar titled “ Mortgage Modification Mediation in Bankruptcy “ The Webinar was provided by Kristin Zilberstein Esq, McCarthy Holthus, LLP, Nicole Noel Esq,Kass Shuler, PA, Shirley Palumbo, Esq, Gladstone Law Group, P.A., Emil Menk, Esq, Brock & Scott, PLLC, William B.Schiller Esq, Schiller, Knapp, Lefkowitz & Hertzel, LLP.

MEMBER WEBINAR

On October 27, 2015 the ALFN hosted a Member Webinar titled “Florida Foreclosure Law: A View from the Bench” The Webinar was provided by David J. Schneid, Esq, Managing Partner, Robertson, Anschutz & Schneid, PL ALFN member in Florida, Hon. William H. Burgess, III, Sixth Judicial Circuit, Seminole, FL, Hon. Jack Day, Sixth Judicial Circuit, St. Petersburg, FL, Hon. Thomas H. Minkoff, Sixth Judicial Circuit, St. Petersburg, FL.


8 / ANGLE

Meet us BEHIND THE SCENES

ASHLEIGH BOUSELLI ADMINISTRATIVE & EVENTS COORDINATOR ABOUSELLI@ALFN.ORG (636) 887-6802 LOCATION: ST. LOUIS, MO

ADMINISTRATIVE & ON-SITE EVENTS MANAGEMENT

CADE HOLLEMAN, M.A. VICE PRESIDENT GOVERNMENT AFFAIRS & COMMUNICATIONS CHOLLEMAN@ALFN.ORG (714) 679-2514

LOCATION: WASHINGTON, D.C.

ADVOCACY, GOVERNMENT RELATIONS & EXTERNAL COMMUNICATIONS


MATT BARTEL

PRESIDENT & CEO MBARTEL@ALFN.ORG (636) 257-4500 LOCATION: ST. LOUIS, MO

LIZ POTTER

SENIOR VICE PRESIDENT, MEMBER RELATIONS & BUSINESS DEVELOPMENT LPOTTER@ALFN.ORG (513) 257-9948 LOCATION: CINCINNATI, OH

PRESIDENT & CHIEF EXECUTIVE OFFICER

MEMBER RELATIONS, RETENTION AND NEW BUSINESS DEVELOPMENT


10 / ANGLE

state snapshot: ILLINOIS JUDICIAL LANDSCAPE IMPROVES WITH APPELLATE WINS CODILIS AND ASSOCIATES DISCUSSES APPELLATE VICTORIES THAT BENEFIT CLIENTS AND PRACTITIONERS THROUGHOUT ILLINOIS

by Adam Wilde, Esq., Codilis & Associates

Over the last few years, Codilis & Associates has helped shape Illinois Foreclosure law to the benefit of creditors. Since 2011, Codilis has secured over 95 appellate victories, all relating to foreclosure actions. In 2015, Codilis secured multiple appellate victories for its clients. The impact of these victories has helped reduce future, unnecessary litigation, cutting off legal arguments constantly made by foreclosure defense counsel. Below is a review of some of Codilis’s most recent appellate victories secured in 2015.

BEAL BANK V. ROSA BARRIE, 2015 IL APP (1ST) 133898 In this case, the Defendant attempted to raise a foreclosure defense that the Grace Period Notice (“GPN”) required pursuant to Illinois Law was not properly sent. The Defendant raised this defense for the first time one month after the plaintiff filed its motion to confirm the sale. The trial court denied Defendant’s argument and the Defendant appealed. Following the Illinois Supreme Court’s ruling in Wells Fargo Bank v. Mcluskey, 2013 IL 115469, the appellate court in Barrie held that raising a GPN defense for


the first time at such a late stage was insufficient to deny the confirmation of the sale. The Barrie case drew a clear line in the sand, making certain that such late stage defenses raised for the first time, and after the filing of a Plaintiff’s Motion for Confirmation of Sale shall be denied. Its ruling shall help cutoff future legal arguments made by defense counsel. CITIMORTGAGE, INC. V. HOEFT, 2015 IL APP (1ST) 150459 In Hoeft, the borrowers became delinquent on their mortgage payments. Pursuant to the mortgage, the mortgage servicer issued a demand letter on November 11, 2010. The letter informed the borrowers of the default and provided that the loan would be accelerated if the borrower failed to pay by December 11, 2010, providing exactly thirty days to cure. The letter also advised the borrowers that any additional amount that would become due and owing must also be paid to bring the account current. The borrower did not cure and a foreclosure action proceeded. In the foreclosure, the defendant moved to dismiss the complaint and argued the loan was not properly accelerated because the additional amounts due and owing were not properly included in the acceleration notice. The trial court struck the defense, a judgment of foreclosure was granted, the sale was confirmed, and the borrowers appealed. In the appeal, the borrowers argued the demand letter was not valid because it failed to notify them of the “extent of the default” nor “let them know exactly what they need to pay in order to cure the default,” and argued inclusion of the additional payments made the demand ambiguous as the exact amount owed was impossible to identify. The appellate court rejected this argument finding that the amount due on a loan changes daily based on interest accrual stating that such was an “immutable characteristic which is the very essence of the underlying note and mortgage,” and that “this slight omission is an unavoidable consequence of the ability of the borrowers to cure the default during a 30-day window of time, rather than only on

a specific day.” In affirming the trial court’s decision granting foreclosure and finding the demand letter valid, the Court concluded it does “not agree with the Hoeft’s premise that the acceleration letter must anticipate every conceivable event affecting the amount due over the 30-day window.” Because most demand letters contain clauses regarding additional amounts still being due, this case takes future arguments out of play. U.S. BANK TRUST, N.A. V. ATCHLEY, 2015 IL APP (3D) 150144-U Pursuant to Illinois’s mortgage foreclosure law, a trial court is obligated to enter a personal deficiency judgment against a borrower if the property sells for less than the amount due and owing so long as it is (1) otherwise authorized, (2) the Plaintiff requested it in the complaint to foreclose the mortgage, and (3) proven upon presentation of the report of sale. However, some lower courts have not strictly followed the statute, instead requiring Plaintiffs seeking a deficiency judgment to provide additional proof, typically in the way of an appraisal, broker’s price opinion, or other indication of the home’s value.

THIS CASE SHALL HOPEFULLY STOP MORTGAGE SERVICERS FROM JUMPING THROUGH EXTRA HOOPS IN SEEKING DEFICIENCY JUDGMENTS. IN DOING SO, MORTGAGE SERVICERS CAN BETTER COMPLY WITH INVESTOR GUIDELINES REGARDING DEFICIENCIES AND AVOID UNNECESSARY REQUIREMENTS NOT SUPPORTED BY LAW. - Wilde In Atchley, the plaintiff sought a personal deficiency judgment against the borrower and complied with Illinois mortgage foreclosure law. However, the trial court would not grant the request without the plaintiff providing further documentation. On appeal, the court held that because the Plaintiff complied with the procedural requirements for seeking a personal deficiency judgment the court was obligated to enter it and could not require further documentation. The present case was issued as an unpublished opinion. Codilis & Associates has sought leave from the appellate court to have this published. This case shall hopefully stop mortgage servicers from jumping through extra hoops in seeking deficiency judgments. In doing so, mortgage servicers can better comply with investor guidelines regarding deficiencies and avoid unnecessary requirements not supported by law. Codilis & Associates is an ALFN member in Illinois. The Codilis affiliated firms also serve Illinois, Missouri, and Texas and provide end-to-end creditors’ rights services to mortgage lenders and servicers in the default servicing industry. Each firm’s attorneys and staff are committed to providing efficient legal services and professional, courteous, and prompt customer service. For inquiries about appellate work, contact adam.wilde@il.cslegal.com.


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california ON THE BOOKS by Nicole Dunn and T. Robert Finlay, Esq. Wright, Finlay & Zak, LLP

CALIFORNIA HOBR: WHEN IS A BORROWER ENTITLED TO ATTORNEYS’ FEES AFTER ENJOINING A FORECLSOURE SALE? Although it has been effective since January 1, 2013, California’s Homeowner’s Bill of Rights (HOBR) is still working its way through the trial and appellate courts, searching for clarification on many of its unclear provisions. One issue ripe for interpretation is under what circumstance is the borrower deemed the prevailing party and entitled to attorneys’ fees. Civil Code Sections 2924.12(i) and 2924.19(h) give the court the discretion to award reasonable attorney fees and costs to the “prevailing borrower” who is defined as a borrower that “obtained injunctive relief or was awarded damages.” There is no question that borrowers who prevail on their HOBR claims at trial are entitled to their fees.

Likewise, under the recent Court of Appeals decision in Monterossa v Superior Court , it is now equally as clear that borrowers obtaining a preliminary injunction under HOBR are entitled to their fees in bringing the injunction. But, is the granting of a temporary restraining order (“TRO”) considered injunctive relief for purposes of obtaining attorney fees under HOBR? If so, what is to preclude borrowers from systematically applying for TROs (which are often unopposed and usually granted) for the express purpose of funding the litigation with an award of attorneys’ fees obtained due to the preparation of the Complaint and other pre-litigation matters. To determine whether obtaining a basic

TRO entitles borrowers to a fee award requires a closer examination of Section 2924.12(i) and the Monterossa decision. In Monterossa, the court addressed whether Section 2924.12(i) allows for an interim award of attorneys’ fees after the borrower obtains a preliminary injunction as a result of a violation of Civil Code §§ 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17. In Monterossa, the Borrowers/Petitioners filed an ex parte application for a TRO and request for issuance of an order to show cause regarding a preliminary injunction, seeking to prevent the trustee’s sale of their residence. At the preliminary injunction hearing, the court found (on undisputed evidence since


the lender offered no evidence to oppose the borrowers’ claim) that the lender had engaged in “dual tracking” by recording a notice of trustee’s sale while engaged in the loan modification process (prohibited by Civil Code §2924.6(c)) and granted the preliminary injunction. Thereafter, Petitioners filed a motion for attorney fees and costs, which the superior court denied, reasoning that the language of the applicable statute was consistent with the award of attorney fees at the conclusion of the action. The Court of Appeal reversed and concluded that a borrower who obtains a preliminary injunction under Section 2924.12 is a prevailing borrower within the meaning of the statute. In short, trial courts may award attorney fees upon issuance of injunctive relief, which includes the issuance of a preliminary injunction, as well as a permanent injunction. The Monterossa court opined that the statute refers to “injunctive relief,” which plainly incorporates both preliminary and permanent injunctive relief. However, Monterossa did not address the issue of whether the statute also provided for such an award where the borrower obtains a TRO, but no preliminary injunction. Although there are similarities between a TRO and a preliminary injunction, a TRO does not fall within the “injunctive relief” set forth in the statute which would entitle a prevailing borrower to attorney fees. A TRO is an injunction in the sense that it enjoins a particular act pending a hearing on preliminary injunction. Chico Feminist Women’s Health Center v. Scully, (1989) 208 Cal. App.3d 230, 237, fn. 1. However, it is distinguishable in the following ways: 1. A TRO may be issued “ex parte” and notice may be dispensed as its purpose is to preserve the status quo ; 2. In contrast to the ex parte TRO proceeding, a hearing on the preliminary injunction is a full evidentiary hearing giving all parties the opportunity to present arguments and evidence. Civ. Proc. Code (CCP) § 527; 3. A bond is not essential for a TRO unlike a preliminary injunction which is not effective until the undertaking is filed. CCP § 529; 4. The TRO is transitory in nature and terminates automatically when a preliminary injunction is issued or denied. Landmark Holding Group v. Superior Court, (1987) 193 Cal.App.3d 525, 529. The differences between the TRO and a preliminary injunction demonstrate that a borrower who obtains only a TRO rather than a preliminary injunction or permanent injunction, has not obtained “injunctive relief” and has not “prevailed” under Civil Code § 2924(i) as interpreted by Monterossa. Granting of a TRO does not reflect on the merits of the underlying dispute, and does not qualify the enjoining party to “prevailing party” status. Thomas v. Quintero, (2005) 126 Cal.App.4th 635, 652, 664, fn. 21. In the context of what Monterossa recognizes as a unique statutory scheme of HOBR, the best a plaintiff can hope for is a preliminary injunction. HOBR provides an opportunity for a servicer, mortgagee, trustee, beneficiary or

authorized agent to correct and remedy a HOBR violation, which gives rise to the action of injunctive relief, and then move to dissolve the preliminary injunction pursuant to Section 2924.12(i). This compliance with HOBR could potentially moot the borrower’s request for a permanent injunction. Given that the borrower has effectively prevailed in the action by obtaining a preliminary injunction forcing compliance with the statute, the Legislature must have intended to authorize attorney fees and costs pursuant to Section 2924.12(i). Monterossa, supra, at 754. However, that same rationale is not present in connection with a TRO that can be issued on an ex parte basis, without a bond, where the arguments have not been fully presented, where a defendant may not have appeared in the action yet, and which was only intended to last pending the hearing on the preliminary injunction. A borrower might obtain a TRO for a short period of time and then fail to obtain a preliminary injunction because of the failure to demonstrate a likelihood of success on the merits with respect to an alleged HOBR violation. A borrower in that situation cannot be deemed a “prevailing borrower” because they would not have obtained a preliminary injunction forcing compliance with the statute as set forth in Monterossa. In sum, if attorney’s fees are allowable for the mere issuance of a TRO in a HOBR matter, then plaintiffs in these types of cases would receive an absolute windfall at the outset of the matter (1) with little to no evidentiary proof of a HOBR violation; (2) without an objection by defendants who have not yet retained counsel, or who are unable to prepare an opposition and/or attend the TRO due to the short notice of the hearing; and (3) without allowing defendants an opportunity to remedy the alleged violation as contemplated by HOBR. Not only would this be unfair, but it also was not what the Legislature intended. FINAL THOUGHTS AND RECOMMENDATIONS: While Monterossa held that attorneys’ fees are available to borrowers who obtain a preliminary injunction, it does not necessarily mean that every borrower receiving a preliminary injunction will also get a fee award. There are several additional considerations to keep in mind. First, was the injunction granted based on a HOBR claim? Most California cases involve a hybrid of HOBR and non-HOBR claims. It is important for defense counsel to clarify under which theory the court is granting the injunction. We recommend raising this in the opposition to the OSC re: Preliminary Injunction or at the injunction hearing, rather than after the court has granted the injunction. Second, it is key to clarify whether the injunction is conditioned upon the posting of a bond. If so, and the borrower fails to timely post the bond, one could argue that the preliminary injunction never took effect and, therefore, the borrower is not the prevailing party under Section 2924.12(i). Lastly, the requested attorneys’ fees must be “reasonable.” At most, a prevailing borrower would only be entitled to fees incurred in obtaining that relief. We have seen many borrowers seek excessive litigation and pre-litigation fees in obtaining an injunction. Arguing that the fees must be “reasonable” can help limit the fee recovery.


14 / ANGLE

chatter JPEG MEMBERS LOOK AT INDUSTRY TRENDS WANT TO PARTICIPATE? SUBMIT QUESTIONS OR LET US KNOW YOU’D LIKE TO PARTICIPATE VIA ANGLE@ALFN.ORG

TREND

SERVICE RELEASED LOANS

KEITH LEVY, ESQ. MANLEY DEAS

KL1@MANLEYDEAS.COM

Clients and attorneys are facing new challenges that affect the management of defaulted loan portfolios. Service release issues are not a new challenge, but the volume has grown precipitously with most of the major banks selling loans and MSRs to non-bank servicers. The regulatory focus on issues related to service released loans has also grown significantly, mostly directed at evidentiary issues such as assignments and pay histories. New court requirements for affidavits, proof of standing and capacity, as well as regulatory changes to loss mitigation procedures for service release loans, have all given rise to greater delays after a loan is service released. For instance, if an affidavit includes business records of a prior servicer, many judges are requiring language in the affidavit that incorporates the business records of that prior servicer. Also, some judges are requiring documentation in addition to an Assignment of Mortgage if a service release leads to a substitution of party plaintiff, a requirement of many of the contracts between servicers. Judicial requirements that exceed statutory requirements or case law create an additional unanticipated drag on the efficient disposition of judicial foreclosures. Court requirements vary not only from county to county, but sometimes from courtroom to courtroom. Judges routinely request items – such as the per diem interest amount in a complaint or a Broker Price Opinion to support a personal deficiency judgment – without citing any legal basis for doing so. These requirements test the agility of both servicers and their attorneys, as we work to satisfy a particular judge's requirement while advocating and protecting our clients' legal rights. The flexibility of servicers and their attorneys are further tested by a higher percentage of total files becoming litigated. Each of the issues presented above are exploited by defense counsel in efforts to extract settlement agreements or merely more time for their clients. This has led to several appellate cases which have opened the door to even more avenues for defense counsel to delay cases. All of these factors are emerging at a rapid pace, and require great innovation and alertness from both servicers and attorneys in order to maintain expected timelines.


TREND

JUDGEMENT OF FORECLSOURE

As a mortgage servicer, one of the single biggest trends I see affecting the industry is Statute of Limitations (SOL). In 2016, I anticipate a change in case law that interprets SOL, which will have a direct impact on Mortgage Servicing guidelines. Steps that should continue taking place in 2016 includes working with other internal business units (i.e. Foreclosure prevention teams, Document Execution, Bankruptcy and Account Services, etc.), prior servicers and our Attorney Network to ensure we remain compliant with CFPB, State and Investor guidelines.

Looking forward to 2016, the biggest trend in the industry as it relates to mortgage foreclosure and default issues in Illinois, in my opinion, is the increasing scrutiny on servicer affidavits used both in proving up the amount sought in a Judgment of Foreclosure as well as for loss mitigation. As volume continues to decline across Illinois, Judge’s case loads are shrinking allowing them more time to review and analyze each case before the Court. On repeated occasion over the past several months, Judges have continued Plaintiff’s Motion for Judgment of Foreclosure or have denied Plaintiff’s Motion(s) on the basis that the affidavit(s) submitted did not satisfy the particular Judge’s requirement. Moving into 2016, servicers should ensure all payment histories and documents relied upon in executing prove up affidavits and loss mitigation affidavits are attached to the affidavit prior to being filed with the Court in addition to staying closely engaged with foreclosure counsel on Judicial preferences in order to avoid delays in obtaining Judgment.

TONIQUA GREEN NATIONSTAR MORTGAGE

MARCOS POSADOS, ESQ. PIERCE & ASSOCIATES, P.C.

TREND

STATUTE OF LIMTATIONS

TONIQUA.GREEN@NATIONSTARMAIL.COM

MARCOS.POSADA@PIERCESERVICES.COM

TREND

SERVICERS PROCESSES & PROCEDURES REVIEW

Default rates have substantially normalized. With the return to normalcy, servicers and firms have the opportunity in the next year to review their processes and procedures that may have been rattled in the midst of the economic downturn. We can look for opportunities to improve so we’ll be better able to weather future jolts to our industry. Specifically, servicers and firms alike must improve upon the communication between the foreclosure areas and the loss mitigation areas to remain compliant with CFPB and state regulations. JAMES MCPHERSON, ESQ. CENTRAL MORTGAGE COMPANY

JMCPHERSON@ARVEST.COM


16 / ANGLE

Trends millennials

THE MILLENNIAL SHIFT: DELAYED MILESTONES REDEFINE HOMEOWNERSHIP TIMELINE FOR MANY


Narcissistic, lazy, and coddled are terms commonly used to describe them. They are known as spend thrifts that have to have the latest technology or luxury item. Employers complain they exhibit a sense of entitlement and require instant gratification and recognition. They have delayed traditional milestones such as marriage and having children. The real estate industry has been unsuccessful in selling them on home ownership. As Kanye West recently proclaimed at the MTV Video Music Awards, “We are Millennials, Bro. This is a new mentality.” Individuals born between 1982 and 2004 have been classified by most publications as the Millennial Generation. There is increasing focus on Millennials as they have become the nation’s largest living generation, surpassing the Baby Boomer Generation. The perception of Millennials is generally negative. It is no wonder that most individuals classified as the Millennial Generation do not claim the designation. Most choose instead to associate themselves with their predecessor, Generation X. Millennials have redefined the timeframes between adolescence and traditional milestones that were established by previous generations. To this point the Millennials have spurned home ownership in favor of renting. They have preferred to congregate in cities, leaving behind suburban neighborhoods where they were raised. Even though thirty eight year old Kanye West is not a Millennial, he is correct. This is a new mentality. What does the future of the housing market look like for Millennials? To understand the Millennial Generation, one must first understand the environment in which they came of age.

STORY BY J.P. SELLERS, ESQ. MACKIE, WOLF, ZIENTZ & MANN

FOR MANY, IT’S A SCARY WORLD Many factors contributed to the Millennial parent earning the moniker of hoverer and helicopter parent. This time period saw the emergence of higher safety standards, increased health warnings and a rise in terrorist attacks, including school shootings. The most significant factor, however, may have been the advancement


infograph millennials: housing and student loans

75%

Of millennials would rather apply for a mortgage loan with a traditional bank as opposed to an alternative lender or non-bank institution - The M Report

What’s

Driving Millennial Choices A look at the key factors driving millennial’s decisions around where to live, when (and if) to buy, and why they’re hitting milestones later in life than older generations of Americans.

RENTAL MARKETS HEAT UP AS URBAN DEMAND GROWS Twenty five U.S. cities saw rent increases of 9% to 23% year-over-year in the third quarter of this year. The highest, at 23.6% was Cape Coral-Fort Meyers, Florida. Affordable housing costs are estimated at 30% of monthly income. - Business Insider

of technology that increased media availability. Millennials grew up in a time of twenty four hour cable news networks and mobile internet access. The accessibility of the Millennial parent to national news was unprecedented. While the crime rate did not rise during the adolescence of the Millennial, the media coverage allocated to these events skyrocketed. Growing up in Arkansas, one event I remember that received unprecedented media attention focused on three murders in the City of West Memphis,

CERTAIN KEY ECONOMIC DRIVERS CONTINUE TO STRUGGLE FOR TRACTION Although jobs are being created and unemployment continues to fall, wage growth remains very weak with wages of production and nonsupervisory workers up just 0.1% in July compared to June and up just 1.8% year-overyear. This is remarkably different from the last three economic expansions where wage growth ranged from 2.6% to 3.2%. - Barrons

RENTING VS. OWNING: SWEET SPOT OR JUST TOO HOT? Single-family rentals now account for 13% of the overall housing stock, up from 9% in 2005. Rents in San Jose, California appear to be 19% overvalued; 18% in Denver, Colorado; and 8% in Houston, Texas, according to analytics by Moody’s. Generally speaking, rents for single-family homes should be comparable to monthly mortgage payments for a similar house in the same market. - Wall Street Journal

Arkansas. In 1993, the bodies of three juvenile boys were discovered in the woods near the interstate that runs to Memphis. Three teenagers were later convicted of the murders, which were deemed a ritualistic sacrifice. The media coverage brought national attention to the crime as well as the suspected murderers. The teenagers were targeted as suspects in the case due to their gothic look and love of heavy metal music. The convicted teenagers, later nicknamed the West Memphis Three, spent 18 years in prison before their release. The mur-

ders remain unsolved today. Investigative reporter Mara Leveritt covered the murders extensively in the Arkansas Times. The story of the West Memphis Three became the subject of several HBO documentaries. Ms. Leveritt wrote a book titled “Devils Knot” which thoroughly analyzed the details of the crime, profiled potential suspects and presented the innocence of the convicted teens. This book inspired a feature film starring Colin Firth and Reese Witherspoon. This crime had unprecedented longevity in the local and


Two-thirds of the na­tion’s stu­dent-loan debt is held by people over age 30. Thirtyand 40-somethings have the highest loan bal­ances of all bor­row­ers. - National Journal

Student loan debt is the fastest growing consumer debt in the United States, having crossed the $1 trillion mark in 2013.

In 2013, nearly 70% of all graduates from private and public instistutions had $28,400 in student loan debt upon graduation. - TICA.org

At the end of 2014, only 37 per­cent of all 43.3 mil­ lion bor­row­ers na­tion­wide were mak­ing pay­ments on time and re­du­cing their loan bal­ances. - National Journal

Increasing Impact of Student Loans Slow Down Savings Rates In a post-recession world where wage growth has stagnated and many millennials

face under-employement, the decision to buy a home seems less attainable than for previous generations. Property values in major metro areas have risen dramatically, along with rents, and lenders look for a debt-to-income ratio of less than 43% when reviewing mortgage applications. That can be nearly impossible when the average graduate is saddled with over $28,000 in student loan debt. Understandably, millennials are rapidly embracing the “share culture” of Uber and Lyft, choosing higher rents in urban areas with steadier job prospects, and forgoing the timelines of homeownership, marriage and child birth that their parents followed.

national media. The coverage served as a constant reminder of an unsafe world that shaped many parents perception of the environment in which they were raising their children. As millennials came of age, similar events were happening nationwide and were constantly in the media and the minds of parents. Missing children, school shootings, and terrorist attacks dominated the headlines. Millennials became the most sheltered generation in modern history. As a result they delayed moving out of their

parent’s home and delayed becoming homeowners. Analysts attribute this delay to a lack of confidence and a better relationship with their parents then previous generations. A 2012 Pew Research Center survey found thirty six percent of Millennials between the ages of eighteen to thirty one still lived with their parents. That is a five percent increase from 1981. FEED THE BEAST The increased supervision of the Millennial Generation carried over to their education. Millennials were taught

RUNNING ON ‘E’ Most millennial’s report they would rather buy a car and lease a house. 71% of millennials indicate they would rather buy than rent a car, where as 59% would rather rent a house than buy one. 61% admit that they can’t afford a house due to student loan debt and under-employment. - Forbes Entrepreneurs

at an early age that their actions in school would have a direct impact on their future career. Through increased involvement, parents ensured their children were focused on getting good grades and achieving recognition in extracurricular activities. The goal for Millennials was a college education. Millennials are currently poised to overtake Generation X as the most educated generation, once their youngest members come of age. Forecasters assert that in the Millennials lifetime, the bachelor’s degree will likely overtake the high school diplo-


ma as the threshold for many entry level jobs. As college enrollment climbed, so did the percentage of the population with a bachelor’s degree. The increased educated population made the job market more competitive. A more competitive job market increased the demand for higher education, which led to higher tuition costs. As tuition costs rose, so did the percentage of individuals with student loan debt. A 2014 Pew Research Center poll revealed that more than one-third of Millennials have some form of student loan debt. While only half of Millennials with student loan debt have earned their bachelors degree. Student loan debt has made the Millennials the most indebted generation. This debt has impeded their ability to become homeowners. HURRY UP AND WAIT The first Millennials graduated college just ahead of the Great Recession of 2008. Upon graduation, many sought independent living arrangements for the first time. The recession, the worst since the Great Depression, made its impact known almost immediately. In 2006, a Pew Research Center survey found that half of all eighteen to twenty nine year olds were employed in full-time jobs. Four years later that number dropped ten points to around forty percent. The majority of older workers remained employed, while the number of younger employees dropped nine percent. The careers that Millennials had been preparing for suddenly vanished. A Pew Research Center survey conducted in 2009 found that, due to the recession, thirteen percent of individuals between the ages of twenty two to twenty nine had to move back in with their parents after living on their own. While fifteen percent of younger adults reported they had been forced to move in with a roommate. The newly independent Millennials suddenly found themselves returning to their childhood bedroom to contemplate their next steps. Some pursued graduate degrees, others became entrepreneurs, but the majority had to wait for the struggling economy to recover.

The traditional milestones of marriage and children that had seemed closer were now miles away. LIVIN’ IT UP IN THE CITY. As the economy recovered, Millennials re-emerged to resume their once independent lives. Unemployed due to the recession, and saddled with student loan debt, many had delayed traditional milestones such as marriage and having children. The unattached and single millennials opted to live in urban areas. The city offered lower rent with closer proximity to jobs. They were drawn to urban convenience with close shops and restaurants. The city was more active offering a strong nightlife and unique cultural opportunities. However, studies reveal that similar to their parents, as Millennials marry and have children they are leaving the city for the suburban life. The lure of urban convenience is being replaced by the search for good schools and supportive neighborhoods. As the home ownership percentage for Millennials climbs, United States Census Data confirms that more Millennials are currently leaving cities than are moving into them. ARE WE THERE YET? The environment in which the Millennials came of age redefined the timeframe between adolescence and traditional adult milestones. Per the United States Census Bureau, the average age of first marriage is currently twenty seven for women and twenty nine for men. This is a sharp rise from 1960 when the average age was twenty for women and twenty three for men. The delayed trend is the same for childbirth. In a 2006 census bureau report the percentage of childless women ages forty to forty four stood at twenty percent. That percentage had nearly doubled from the 1976 percentage of just over ten percent. That rate, since 2012, has declined to fifteen percent. The reduction confirms that the Millennial mindset is not to avoid children, but merely to delay the milestone. REASON FOR OPTIMISM? One of the most positive characteristics attributed to the Millennial Gen-

eration is optimism. Research shows that even though they lived sheltered childhoods, are saddled with large student loan debt, weathered the Great Recession and are rebuked by the media, Millennials are one of the most optimistic generations. While they have had to put off the traditional milestones, they have made the best of the situation. They have a better relationship with their parents than previous generations. They have spent more time getting to know their spouse before marriage. They have gained more life experiences prior to having children. They have spent time in the city experiencing culture not offered in Suburbia. Many believe these positive experiences created through delaying traditional milestones will redefine the timeframe between adolescence and adult milestones for future generations. Millennials have started to show interest in becoming home owners. Recent data has shown a four percent increase in Millennial home owners to a current rate of thirty two percent. While the Millennials have not been kind to the real estate industry to this point, the industry should not give up on them. Instead follow the Millennials lead and stay optimistic. As with other milestones Millennials are slow to buy into home ownership. However, as their generation has shown, they will eventually get there. J.P. Sellers is an attorney with Mackie, Wolf, Zientz & Mann, an ALFN member in Arkansas and Texas. He can be reached at jpsellers@ mwzmlaw.com.


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www.bakerdonelson.com THIS IS AN ADVERTISEMENT. Ben Adams is Chairman and CEO of Baker Donelson and is located in our Memphis office, 165 Madison Avenue, Suite 2000, Memphis, TN 38103. Phone 901.526.2000. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. FREE BACKGROUND INFORMATION AVAILABLE UPON REQUEST. © 2015 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC


22 / ANGLE

Trends tech

A look at cloud-based case management systems for the default servicing industry


Like so many other industries, the default servicing industry is only now beginning to understand what the “cloud� might mean for their day-to-day operations. For servicers and servicing law firms, the implications of this new technology are potentially profound. A well-designed cloud-based case management system can improve security and compliance, streamline workflow and enhance efficiencies, and provide a framework that successfully balances the competing demands of accessibility, flexibility and security that make the default servicing profession so uniquely challenging.

Story by

adam hansen assure360 CIO + COO

The principles behind cloud computing are fairly straightforward, but the strategic decisions and considerations that responsible default servicing leaders should sort through before transitioning to the cloud can be anything but. Before embracing a cloud-based solution, those professionals would be wise to make sure that they fully appreciate both the potential benefits and the potential risks associated with moving to the cloud, and should be fully conversant with the best strategies and solutions to reduce or eliminate those risks, and with the accepted best practices for law firms looking to maintain compliance during a cloud transition. PUBLIC VS. PRIVATE While the cloud is often referred to as a singular entity, the reality is that there are different types of clouds–with different technological, operational and security


frameworks. Consequently, the first step in any cloud transition is deciding what kind of cloud to move to. One of the primary differentiators is whether a cloud is public or private. Public cloud solutions, such as those provided by familiar names like Google, Amazon or Microsoft, can be an appealingly cost-conscious solution for some, but generally do not provide the same level of flexible customization and security that default servicing companies require. Private (or hybrid) clouds, on the other hand, are capable of providing that customization and meeting the industry’s rigorous security and compliance demands–albeit with a higher price tag. While the cost of a private cloud may be higher, it is still significantly less expensive than the cost of operating a fully equipped IT department.

ONE OF THE MOST CRITICAL ELEMENTS OF A SUCCESSFUL CLOUD-BASED CASE MANAGEMENT SYSTEM IS ITS CAPACITY FOR TIMELY AND EFFICIENT CHANGE MANAGEMENT.

RISK MANAGEMENT In addition to cost, cloud-based solutions offer some compelling risk management advantages when compared with a full-time, in-house IT department. The realities associated with personnel turnover in any IT department present unavoidable security risks, and mitigating that exposure can be both disruptive and expensive. Cloud-based technology virtually eliminates the technical maintenance and personnel oversight requirements that come with an in-house IT department. In contrast, the combination of consistency, efficiency, simplicity and security–all without having to worry about the costs and consequences of aging equipment or suboptimal security infrastructure–is an appealing package for many servicing organizations today.

COMPLIANCE AND COST STRUCTURES For a cloud-based case management solution to effectively deliver the functionality that default servicing professionals are looking for, it must be both flexible and powerful. That flexibility is essential when it comes to making system changes quickly and efficiently as the regulatory environment evolves, and that power is required to provide sufficient operational horsepower and robust security protocols. Details matter when assessing the efficacy of a case management solution. Decision makers should dig into operational specifics, such as how file changes are documented, and how access and permissions are managed. In an industry where security is paramount and where the speedy production of compliance-focused reporting is such a valuable asset, it makes sense to ask about step-dependent processing and other security architecture, and to understand the details regarding data management and report generation capabilities and procedures. The best systems also offer built-in timeline and deadline management tools that keep files moving faster and more efficiently. Because flexibility is such an enormously important–even essential– piece of the case management puzzle (arguably more so today than ever before, with institutional uncertainty and a range of firm-specific interpretations of OCC mandates), many servicing organizations will prioritize custom-designed case management systems capable of integrating their specific policies and procedures. In an environment where standards, expectations and auditing procedures can vary significantly from one firm the next, that flexibility makes it possible for servicers to meet the needs of all clients and professional partners without incurring extra expense or delays. TRANSPARENCY AND REPORTING As many servicing professionals are well aware, the best cloud-based systems need to be more than just secure, they also need to be transparent. In 2015, “compliance” in the servicing world means “provable compliance,” and case management

solutions that can deliver speedy and complete transparency (typically through powerful and flexible reporting tools) are in high demand. In that context, custom reporting based on client or auditor-specified criteria is not a luxury, it is a necessity. When evaluating potential case management solutions, decision makers should assess whether a potential candidate provides the requisite speed and flexibility to meet their needs. Cloud-based solutions that meet those criteria can help an organization save time on audits, and can streamline and simplify regular reporting obligations. This technology can dramatically reduce downtime and minimize the compliance-related headaches and delays that have become widespread in an industry that still lacks a single consistent audit process. The ability to access customized reporting across every data field in a system all at the push of a button is a significant paradigm shift for servicing organizations. THE ONLY CONSTANT One of the most critical (and yet, ironically, underappreciated) elements of a successful cloud-based case management system is its capacity for timely and efficient change management. With regulatory standards evolving so rapidly, corresponding procedural and workflow changes need to be deployed almost immediately. The best cloud-based technologies make that possible, streamlining the process of documenting, evaluating and testing changes, doing so in a safe and secure environment, and making it possible to easily roll back changes if any problems arise. In the final analysis, an investment in cloudbased case management technology has the potential to upgrade not only the technical architecture of a servicing organization, but also the operational infrastructure: facilitating new processes and procedures that can help make processing, managing and auditing files significantly more efficient and effective. Adam Hansen is the COO and CIO of assure360. He can be reached at adam.hansen@assure360.com.


MD & DC’s Award Winning Legal Team Cohn, Goldberg & Deutsch provides legal services in all aspects of default work. Martindale-Hubbell AV rated, our employees have an average of 12 years of experience to better serve the needs of our clients. Our staff has a unique perspective on federal, state and local laws, an understanding of their historical development and an ability to interpret complicated emerging trends.

600 Baltimore Avenue Suite 208 Towson, MD 21204-4084

(410) 296-2550 www.cgd-law.com


26 / ANGLE

Trends work + life balance

IS “BABY TRACK” STILL A CONCERN FOR YOUNG PROFESSIONALS LOOKING TO CLIMB THE CORPORATE LADDER AND NOT ONLY STAY IN THE GAME, BUT ON TOP OF THEIR GAME?


When my husband and I decided to start a family, I was very concerned about the effect it would have on my career as a young legal professional. As a fourth year associate I was working 16-18 hour days, and as a third-year surgical resident my husband was spending well over 80 hours a week in the operating room. Like so many women in the legal field, I began asking myself these questions: Can I manage my workload and successfully raise a child? How much longer should I wait if I want the family I’ve always dreamed of? Would having a child place me on the “baby track” so that I could never achieve the coveted position of managing partner? In other words, could I have it all? A quick review of the literature on point indicated that I could not have it all. Articles like “The Opt-Out Revolution” by Lisa Belkin, suggested that highly qualified women drop out of corporate practice because they are unable to strike a ‘work-life’ balance after their first born arrives. Likewise, the American Bar Association’s most recent survey found that women account for approximately 47% of law graduates and 45% of entry-level associates at private law firms, but at the largest law firms in the United States, only 17% of equity partners are women and only 4% are managing partners. As an eternal optimist, I refused to accept these staggering statistics and as a working mother of one – soon to be two – boys, I could not be more grateful. But the question still remains, can you “have it all” while “doing it all”? As any good lawyer knows, it depends. But what does it depend on?

COVER STORY BY MELISSA SGROI, ESQ. MALCOLM CISNEROS

FACTOR ONE: DOES YOUR EMPLOYER OFFER OPTIONS TO SUIT YOUR NEEDS? Over the past thirty years, law firms have taken steps to improve the worklife balance by embracing modern technology and modern business practices. These options include, inter alia, maternity leave, flexible work schedules, and telework. While you may not choose to utilize any of these options, knowing what is available can


help you succeed both professionally and personally. MATERNITY LEAVE For those women who wish to spend quality time bonding with their child after birth, maternity leave is invaluable. Under the Family Medical Leave Act (“FMLA”) eligible employees may take up to a total of 12 weeks of unpaid leave during any 12-month period for qualifying reasons, including birth of a child. 29 USC § 2612(a) (1), (C). In addition, some states, like California, require certain employers to provide pregnant women a leave of absence of up to 4 months. Cal. Gov’t Code § 19845(a). While employers are not obligated to pay you during this period, the employer must maintain the employee’s health benefits and must guarantee the employee reinstatement to the same or an equivalent position upon completion of the leave. I personally chose to take 12 weeks of maternity leave despite concerns that taking maternity leave would put me at a disadvantage. Like many women, I feared that my colleagues and mentors would automatically place me on the “baby track”, my cases would suffer, and I would be “rusty” upon my return. But maternity leave can be an opportunity to shine if you are prepared, organized, and accessible. For example, you should speak to your employer early on in your pregnancy and provide him/her with a proposed plan to manage your caseload. Organize your files by preparing a history of the case, updating the files weekly, compiling relevant research, and drafting a list of deadlines that will need be satisfied upon you departure. Meet with each attorney that will manage your caseload and introduce them to the relevant players before you leave. By preparing for maternity leave, you can transition into and out of leave smoothly. Be accessible during maternity leave. While my hands were not glued to the computer eighteen hours a day, I reviewed my e-mails each evening and picked-up the phone when a colleague was struggling to address a new development in a case. Not

only did my co-workers appreciate my availability, they respected the fact that I did not leave them in a lurch. Moreover, I was able to return to work fully educated about the critical path of each case. FLEXIBLE WORK SCHEDULES Reduced-hour arrangements are another option that firms have started to offer returning mothers. Firms recognize that opportunities for reduced-hour arrangements are necessary to attract and retain a talented labor pool. These types of reduced hour arrangements require a minimum amount of time that associates/ partners must work, which is typically expressed as an annual number of billable hours, days per week or percentage of a full-time schedule.1 Yet, many associates are hesitant to reduce their hours for fear that their schedules will not be respected, their hours will creep up, the quality of their assignments will go down, their pay will not be proportional, and they will be stigmatized as “slackers.” In an article entitled Finding My Way on a Reduced-Hours Schedule, lawyer Sara Dionne reported that “the work [she] does as a reduced-hours lawyer is the same work [she] did as a fulltime lawyer” and she still feels “engaged and challenged by [her] work.”2 The only difference for Ms. Dionne is that her work moves at a slower pace, making for a manageable practice and a happier home life. Likewise, the Women’s Bar Association of Massachusetts found that reduced-hours arrangements can be very valuable provided the firm and employee are fully committed to crafting a schedule that is conducive for both parties.3 Based on these findings, it would 1 The Women’s Bar Association of Massachusetts, More than Part-time: The Effect of Reduced-Hours Arrangements on the Retention, Recruitement and Success of Women Attorneys in Law Firms (2000). 2 Sara E. Dionne, Finding My Way on a Reduced-Hours Schedule, The Woman Advocate (Sept. 2011). 3 The Women’s Bar Association of Massachusetts, More than Part-time: The Effect of Reduced-Hours Arrangements on the Retention, Recruitement and Success of Women Attorneys in Law Firms (2000).

seem that many of the fears listed above are unsubstantiated. TELEWORK/TELECOMMUTING Telework (also known as telecommuting) is another option for working mothers looking to balance the demands of the workplace and home. Telework refers to a work flexibility arrangement under which the employee performs the duties and responsibilities of such employee’s position from an approved worksite other than the location from which the employee would otherwise work (i.e. home, telework center). As stated by Nicole Belson Goluboff, author of The Law of Telecommuting and Telecommuting for Lawyers, “telecommuting can be an outstanding setup for many lawyers.” Not only does telework offer an employee an opportunity to address family obligations and reduce expense and commute time, firms often see increased billable hours and productivity from their telecommuting employees. Although I am not a telework employee, my firm offers telecommuting options to employees and emphasizes the use of technology to assist employees with work-life balance. For example, as a working mother I need to relieve my nanny around 6:30 p.m. By allowing me to telework in the evening, I can spend a couple hours with my son before he goes to bed and return to work later that evening, satisfied that neither my personal or professional life is suffering. FACTOR 2: DO YOU HAVE A STRONG SUPPORT SYSTEM? Deborah Epstein Henry, a former lawyer and author of the book Law & Reorder: Legal Industry Solutions for Restructure, Retention, Promotion & Work/Life Balance, states “[t]he legal environment in which women practice is one that has been designed in a male model. It’s a model that works best when you have somebody at home taking care of all the details of your life.” That is why it is so very important for a working mother to establish a network of support before returning to work. This network consists of a broad


I PERSONALLY CHOSE TO TAKE 12 WEEKS OF MATERNITY LEAVE DESPITE CONCERNS THAT TAKING MATERNITY LEAVE WOULD PUT ME AT A DISADVANTAGE. LIKE MANY WOMEN, I FEARED THAT MY COLLEAGUES AND MENTORS WOULD AUTOMATICALLY PLACE ME ON THE “BABY TRACK”, MY CASES WOULD SUFFER, AND I WOULD BE “RUSTY” UPON MY RETURN.

MELISSA SGROI, ESQ. MALCOLM CISNEROS

spectrum of individuals or group of individuals, including a spouse, an extended family member, or a caretaker (i.e. nanny). In my opinion, it doesn’t matter who it is; it matters that you trust them indefinitely and that they understand what you do for a living. My support network is comprised of many people, each of whom plays a significant role in my success. For example, my husband shares equally in household duties and continues to push me to be both a better lawyer and a better parent each day despite his grueling call schedule. In fact, without his support, I would not have found the energy at 36 weeks pregnant to write this article while my son sleeps soundly in the nursery. Likewise, I would not have decided to juggle a career and family without my mother showing me that she could do it in 1983 when professional women were not the norm. After I delivered my son, I may not have returned to work if it wasn’t for my parents and inlaws who took turns traveling to visit

and care for my son week after week until I found the perfect nanny – a nanny who shows up at 5 a.m. when I have to make the drive to Los Angeles Superior Court and takes notes of my son’s daily accomplishments so that I never miss a single “first.” FACTOR 3: WHAT IS YOUR DEFINITION OF SUCCESS? Last, but certainly not least, in order to “have it all” you need to define what success means to you. According to Merriam-Webster, success is "the fact of getting or achieving wealth, respect, or fame.” For poet laureate, Maya Angelou, "[s]uccess is liking yourself, liking what you do, and liking how you do it." For me, success is an accomplished career, a supportive marriage, and a strong relationship with my children. Over the course of a week, I will often tell my husband that I feel I am only achieving 75% in each category despite the fact that I am successfully tackling each of my daily tasks. In response, he will re-

mind me that 225% is more than any one person can give, so it seems that I am relatively successful. In the end, I think being a working mother in the legal field involves a lot of sacrifice, but you can “have it all” while “doing it all” if you utilize the tools at your disposal, surround yourself with a strong support system, and define what success means to you. Melissa Sgroi, Esq. is an attorney with Malcolm Cisneros, an ALFN member in California. The firm also services Arizona, Colorado, Nevada, Oregon, Texas and Washington. Sgroi can be reached at MSgroi@ mclaw.org.


30 / ANGLE

ATTORNEYS STEVE TRAN AND ANDREW FIVECOAT JOIN eXL LEGAL

Doug Zahm and Doug Bales of eXL Legal, PLLC are pleased and proud to announce that attorneys Steve Tran and Andrew Fivecoat have joined eXL Legal, PLLC as firm partners. Steve and Andy are former partners of the Law Offices of Daniel C. Consuegra and bring their many years of industry and legal experience to the firm in all areas. They have routinely lectured and trained at banks and servicers on all matters of default law. With these quality additions to our firm eXL Legal now offers clients one of the highest average years of attorney experience in the industry at greater than 18 years. Feel free to contact Steve (sdt@ exllegal.com), Andy (alf@exllegal.com), or Dave Mitchell (dmitchell@exllegal.com) at 727536-4911 to discuss our default legal services or your organization’s legal educational needs in Florida. The team at eXL Legal is ready to support you and your team with all of your default portfolio needs.

POTESTIVO PROMOTES ATTORNEY ANDREA PARAVANO, ESQ.

Potestivo & Associates, P.C. is pleased to announce the promotion of Andrea M. Paravano, Evictions Manager on July 6, 2015. Andrea joined the team at Potestivo & Associates, P.C. in 2008 as one of the firm’s file clerks. Since that time, she has worked her way up through the Evictions Department, moving from File Clerk to Evictions Supervisor. With her recent promotion to Evictions Manager, she has taken on a more supervisory role within the department.

POTESTIVO HIRES ATTORNEY MICHAEL SADIC, ESQ.

Potestivo & Associates, P.C. is pleased to announce the hiring of M. Michael Sadic, Associate Attorney. Based at the firm’s Chicago Office, he will serve support the firm’s Litigation and Foreclosure Departments. Michael attended North Park University in Chicago, Illinois on a four-year scholarship for demonstrated excellence in academics and athletics. He completed his B.A. in Political Science in 2008. Michael earned his J.D. at Thomas M. Cooley Law School in Lansing, Michigan in 2011. In addition to making the Dean’s List during all three years of law school, Michael held the position of Associate Editor for the Thomas M. Cooley Law Journal. He also earned a Certificate of Merit in Estate Planning while attending law school.

POTESTIVO HIRES ATTORNEY KATHLEEN CONGER, ESQ.

Potestivo & Associates, P.C. is pleased to welcome Kathleen G. Conger as Compliance Manager in the Firm’s Rochester Hills Office. As part of our ongoing commitment to recruit team members who contribute to the highest level of professionalism and integrity, Potestivo & Associates, P.C. is pleased to announce the hiring of Kathleen G. Conger. Kathleen was welcomed on Monday, August 10, 2015. Based in the firm’s Rochester Hills office, she serves as Compliance Manager, supporting the firm’s Michigan and Illinois offices.

ALFN MEMBERS ON THE MOVE POTESTIVO HIRES ATTORNEY ELIZABETH send us your updates at angle@alfn.org to be included in this section

KANOUS, ESQ.

Potestivo & Associates, P.C. is pleased to announce the hiring of Elizabeth Kanous. Elizabeth joined the attorney team on Monday, August 24, 2015. She is located at the firm’s Rochester Hills office as Supervising Attorney, primarily serving the Bankruptcy Department. Elizabeth completed her B.S. at Grand Valley State University in 2003, where she majored in computer information systems. She went on to earn her J.D. at University of Detroit Mercy Law School in 2007, where she was a Dean’s Scholarship Recipient.


OHIO-BASED FIRM FELTY & LEMBRIGHT ANNOUNCES NEW PARTNER Felty and Lembright Co., L.P.A. is pleased to announce that Antonio Scarlato has been promoted to Partner in the Firm.

“Tony has been a valuable asset to the firm over the years, and we are looking forward to his input in his new role.” said Kriss Felty, Managing Partner. “Tony possesses the unique ability of maintaining a pulse on the moving parts of the mortgage default servicing industry as he advises our clients on these changes and manages the internal operations of the Firm. At the same time, his expertise has led to our clients’ successful litigation of complex residential real estate cases throughout the State of Ohio. Tony’s dedication to our clients embodies the tenet of our Firm.” Tony oversees the daily operations of the Firm’s real estate default practice. His duties include ensuring successful legal compliance with all applicable investor regulations (FNMA, FHLMC, FHA and VA), applicable State and Federal laws, servicer requirements, and County-specific requirements. Tony also assists the Firm’s Chief Compliance Counsel with regulatory compliance matters and collaborates with the Firm’s Litigation Counsel on litigated matters. He regularly counsels clients on legal and regulatory issues affecting the mortgage default industry and provides in-house training for mortgage servicers on wide-ranging topics. Tony has been with the Firm since 2004 serving as the Firm’s Managing Attorney for the last seven years. Practicing law in Ohio for over 14 years he has 11 years’ experience representing lenders and servicers in real estate default matters, including residential foreclosure actions, appeals, real estate litigation, eviction actions, and real estate title matters. Tony can be reached at tscarlato@ feltyandlembright.com.

WHAT’S COMING UP NEXT:

TEACH REGIONAL TRAINING IN DALLAS, TEXAS ON NOVEMBER 12 ALFN is proud of how TEACH Regional Training series that has grown over the years! The goal of this effort is to bring the latest information and top legal education to servicing personnel on a regional scale. The training is meant for an audience that does not typically travel to the ANSWERS conferences, but still needs to be current on the issues trending in compliance, litigation, foreclosure, eviction and bankruptcy in default servicing. This year we produced a TEACH training in Jacksonville in early September that had over 80 attendees including personnel from Ditech, Selene, JPMorgan Chase, Citi and other servicers in the Jacksonville area. Our next regional TEACH will be held on November 12th in Dallas, TX at the Marriott Las Colinas. All members, lenders and servicers are welcome and a networking luncheon and cocktail reception are included.

BEFORE YOU MISS IT:

ARVEST/CENTRAL MORTGAGE TEACH ONSITE TRAINING The first week of September, members from 15 member law firms participated in an onsite TEACH Training at the Arvest Ballpark in Springdale, AR. This two day training covered issues in many states and was created by the attorneys of both Arvest and Central Mortgage working closely with the ALFN Executive Team. Multiple issues were addressed including: state by state news in foreclosure, mobile home issues, bankruptcy updates, and issues in litigation across the country. The following statements regarding the TEACH Onsite were sent to ALFN from attendees: “Arvest Bank/Central Mortgage Company truly appreciate the time and effort put forth by the ALFN members that participated in the on-site TEACH training. Often our staff outside of management does not have the opportunity to attend industry conferences, and the ALFN on-site gave them a conference type atmosphere and level of engagement with our firms that they would not otherwise receive. We benefit greatly from this program, and our relationships with counsel, and understanding of the issues impacting our industry are significantly strengthened through these events,” said James M. McPherson, Esq., VP, Central Mortgage. Sara E. Heck, Esq., VP, of Arvest Bank added, “In September, ALFN brought a TEACH conference onsite for Arvest. It was a phenomenal 2 days of training and networking with our associates and attorneys. We appreciate the opportunity to visit with our existing counsel, as well as making new connections with counsel from different areas. Thank you for a great conference, ALFN!”


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Did you know the ALFN offers scholarships for servicers to attend events? What’s more, you can offer this perk to your clients or potential clients and pay this value-add forward to those in your network. Ask us how @ALFN_Network

BALANCING YOUR VOLUNTEER EFFORT


Maryland, Virginia, North Carolina, South Carolina, Tennessee, Georgia and Florida With physical offices in each state, Brock & Scott provides comprehensive default services including judicial and nonjudicial foreclosure, bankruptcy, eviction, REO, title curative, litigation, collection and closing services in all of our states.

ATTENDING ONE OF OUR REGIONAL TRAINING SEMINARS PUTS YOU FACE-TO-FACE WITH LEGAL EXPERTS WHO CAN TRAIN YOUR FRONT LINE AND MANAGEMENT LEVEL STAFF

UP NEXT

TEACH DALLAS NOVEMBER 12, 2015 DALLAS MARRIOTT LAS COLINAS DALLAS, TX ALFNEVENTS.ORG

Visit us at BrockandScott.com for information on each practice area, office locations, attorney search, seminar & training offerings and our newsletter publications.

Jim Bonner jim.bonner@brockandscott.com 910-392-4988 x4410 Kevin Frazier kevin.frazier@brockandscott.com 336-354-1200 x3709

“The Default Services Leader in the Southeast”

LIZ POTTER SVP, BUSINESS DEVELOPMENT & MEMBER RELATIONS LPOTTER@ALFN.ORG 513-257-9948


ARCHIVED ONLINE AT ALFN.ORG

MEMBER BENEFIT:

ALFN WEBINARS NEVER STOP LEARNING CLASS ON AYS WEDNESD

HOSTING AN ALFN WEBINAR JUST MIGHT SURPRISE YOU: + AVERAGE ATTENDANCE OF 200+ INCLUDING MORTGAGE SERVICERS + PRESENTERS RECEIVE CONTACT INFORMATION FOR ALL ATTENDEES + POSITION YOURSELF AS A SUBJECT-MATTER OR STATE-SPECIFIC EXPERT + EXPOSURE TO OVER 6,000 MORTGAGE SERVICING INDUSTRY PROFESSIONALS + BUILD CREDENTIALS OF YOUR YOUNGER ASSOCIATES + EACH MEMBER RECEIVES ONE COMPLIMENTARY WEBINAR OPPORTUNITY* *Each ALFN member has the opportunity to conduct one complimentary webinar each calendar year. Additional webinars are offered at a nominal $1,000 fee. Participants of ALFN Committees, Groups and those participating at the request of the ALFN are exempt. Shop the ALFN Media Kit (alfn.org/media_kit) or contact us at info@alfn.org for more details.


JULY 17-20, 2016 OMNI GROVE PARK INN ASHEVILLE, NORTH CAROLINA REGISTRATION OPENS JANUARY 2016

DETAILS AT ALFNANSWERS.ORG

ALFN ANGLE Fall 2015 Issue  

The ANGLE is the official publication of the American Legal & Financial Network (ALFN). Learn more at ALFN.org

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