SAN MARCOS, Calif. /California Newswire/ — Annemaria Allen, founder and president of leading mortgage compliance services provider The Compliance Group, Inc. (TCG), encourages mortgage servicers to embrace a "borrower-adaptive" attitude in light of the Consumer Financial Protection Bureau's (CFPB's) final mortgage servicing rules.
The guidelines, issued on Jan. 16, require servicers to wait until a mortgage is 120 days delinquent before filing a first foreclosure notice, and servicers must also inform borrowers of all loss mitigation options after the borrower has missed two consecutive mortgage payments. In addition, servicers are prohibited from beginning the foreclosure process if the borrower has already submitted an application for a loan modification or other foreclosure alternative. Servicers that deal with 5,000 or less loans are exempt from the guidelines. The guidelines also address single-point-of contact policies and procedures as addressed by the national foreclosure settlement reached last year.
"Mortgage servicers are now clearly in the customer service business with borrowers as well as investors and that should come as no surprise to anyone who has been following the industry," Allen stated. "In the simplest terms, servicers need expertise and fast on how to adapt to consumer-centric business practices that meet CFPB expectations."
Some of the customer service-centric items in the CFPB's rules include:
* Restricting servicers from steering borrowers to loss mitigation options that financially benefit the servicer the most;
* Providing borrowers with all foreclosure alternatives available to them and with adequate time to consider and accept a foreclosure alternative offer once it has been extended;
* Offering borrowers regular monthly statements that clearly outline the amount owed, the due date of the next payment and a breakdown of payments according to principal, interest, fees and escrow, including recent transaction data;
* Issuing a disclosure to inform the borrower of the first rate adjustment on an adjustable-rate mortgage;
* Providing advance notice of and pricing information on forced-placed insurance; and
* Shortening response times to written borrower requests for payoff balances, account error notices, etc.;
* Same-day crediting of payments to borrowers' accounts; and
* Providing borrower information in a timely manner when requested by the borrower, investors and the courts.
"There are reasonable strategies for success and those strategies must be built on adopting a total mortgage lifecycle perspective encompassing origination through servicing," Allen added. "What impacts one part of the loan lifecycle will inevitably impact the whole loan, and by embracing enterprise quality control and proactive compliance tactics, mortgage servicers, mortgage lenders and mortgage investors create a benefit for the entire industry."
About The Compliance Group:
The Compliance Group (TCG) is a leading nationwide financial services risk management organization focused solely on its clients' compliance success (www.TheComplianceGroup.net). TCG has helped hundreds of financial institutions mitigate risk and losses with its proprietary, patent-pending technology and its core business solutions of Compliance, Quality Control and Licensing. Founded by Annemaria Allen in 2000, TCG has built upon her deeply experienced understanding of compliance and risk management to bring peace of mind to the financial services industry.
TCG's LicenseTracker(R) (www.LicenseTracker.net) is a patent pending, web-based application, to help mortgage businesses, branches, and loan originators maintain and track required state and federal agency licensing deadlines and continuing education requirements.
TCG technology is complemented by its experts' keen attention to delivering results the right way – with integrity, quality, transparency, reliability and customer care. Its appreciation for relationship building allows TCG to assist its clients in understanding the complexity of compliance, developing their strengths in areas of risk while turning compliance and quality control into a profitability strategy.
For more information, contact Annemaria@TheComplianceGroup.net.
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