We Need Uniform Certification of Settlement Professionals By Andrew Liput
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JUNE 2016 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
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ow that the settlement industry has come to terms with the Consumer Financial Protection Bureau’s (CFPB) third-party service provider directives (I admit, there are a few holdouts), the industry needs to take the management of settlement agent risk to the next logical step. There is a need for the uniform certification of settlement professionals. When I began to research and consider the issue of risk to banks and consumers at the closing table way back in 2002, the biggest issue that struck me was the lack of uniformity among those entrusted with funds and documents. This problem stemmed from the fact that those empowered to manage the settlement of a residential mortgage loan closing were very diverse. The group included lawyers, title and escrow agents, notaries, closers and real estate agents. Each of these disciplines had (and still does have) its own licensing, insurance, training, continuing education, and professional disciplinary process. Some, like lawyers, are highly skilled, trained and supervised, yet because closings are often conducted by real estate attorneys, they include people who know a lot about contracts but not much about mortgages. Others, such as notaries, can face either a very stringent licensing process or merely file an application and pay a fee to gain access to a consumer’s records, closing table checks, and even a consumer’s living room. Licensed title producers are highly skilled, independent contractors they send to a closing may not be. In the absence of a uniform set of expectations, standards and practices, the lending community has for years received varying degrees of professionalism in services, and their consumer clients have likewise observed uneven closing table experiences. So how do we address the matter? I believe that the various associations, such as the American Bar Association (ABA), American Land Title Association (ALTA), Independent Escrow Association and National Notary Association (NNA) should come together to create a multidisciplinary Certified Closing Professional Program that takes into consideration the foundations of knowledge, training, experience and education relevant to each group. The program should cover “Mortgage Lending 101,” how to spot, prevent and report mortgage fraud, preparing the closing disclosure, handling document review and closing table questions by consumers, typical closing table issues and problems and how to address them, data privacy and security expectations, and ethical and professional communications with borrowers, among other topics. The designation would require ongoing education and an annual re-certification. Recipients would carry a photo ID card with their identification information and a unique identifier. Some of these ideas have been addressed by ALTA, but to be successful, a program must cross all disciplines and establish uniform expectations for lenders and consumers. Now that we all agree that settlement agents should be vetted for risk, the time is now to address their performance and professionalism.
Andrew Liput is CEO of Secure Insight, a risk analytics firm offering vendor management services addressing settlement agent risk. He can be reached by e-mail at ALiput@SecureSettlements.com.
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“What kind of a man does that? Root for people to get thrown out on the street?” Trump dismissed the new Clinton-Warren attack plan during a rally last night in Albuquerque, N.M., stating that he was discussing a common business strategy of making purchases on commodities when they are in a price decline. “Yeah, if it goes down, I’m gonna buy,” Trump said. “I’m a businessman, that’s what I’m supposed to do. If it goes down, it goes down. I feel badly for everybody. What am I going to do? It’s business!” FDIC Announces $190M Countrywide Legacy RMBS Settlement
Eight financial institutions have agreed to a $190 million settlement with the Federal Deposit Insurance Corporation (FDIC) to resolve claims related to the role played by their residential mortgage-backed securities (RMBS) in the failure of five banks. The settlement concludes federal and state securities law claims that alleged misrepresentations in the offering documents for 21 Countrywide RMBS that were purchased by the five banks, which failed during 2008 and 2009. The settlement funds will be distributed among the receiverships of these defunct banks. The eight financial institutions named in the settlement are Barclays Capital Inc., BNP Paribras Securities Corporation, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Edward D. Jones & Co., Goldman, Sachs & Co., RBS Securities Inc. and UBS Securities LLC. The banks that failed included two Texas institutions (Franklin Bank in Houston and Guaranty Bank in Austin), Colonial Bank of Montgomery, Ala., Security Savings Bank of Henderson, Nev., and Strategic Capital Bank of Champaign, Ill.
HOPE NOW: 86,000 Loan Mods in Q1
The first quarter of this year saw mortgage servicers arranging 319,000 non-foreclosure solutions for distressed homeowners, according to data released by HOPE NOW, a five percent increase from the 303,000 solutions coordinated during the fourth quarter of 2015 and a 26 percent decline from the 432,000 in the first quarter of 2015. There were 86,000 loan modifications completed in the first quarter, with roughly 62,000 homeowners received proprietary loan modifications and approximately 24,000 loan modifications completed under the Home Affordable Modification Program (HAMP). The represents a 26 percent decline from the 117,000 loan modifications in the first quarter of 2015. Other year-over-year declines included foreclosure sales (approximately 91,000 in the first quarter, down five percent), completed short sales (19,000, down 19 percent), deeds in lieu (5,300, down nine percent) and delinquencies of 60-plus days (1.72 million, down 11 percent). “With general market recovery and stability over the past year, HOPE NOW is concentrating efforts on streamlining the assistance process for homeowners,” said Eric Selk, executive director. “We have looked at communication between servicers and homeowners and provided suggestions on improving the customer process. HOPE NOW is also very active in conversations focusing on the loss mitigation world once HAMP expires.” OCC Ends Servicing Order on Wells Fargo
The Office of the Comptroller of the Currency (OCC) has continued on page 26