Default Servicing Reform

Unprecedented, complex and sweeping
organizational changes

ConsentOrderDocs

 

With the April 13, 2011 announcement of formal enforcement actions against certain mortgage servicers and third-party service providers and the April 28, 2011 Federal Housing Finance Agency (FHFA) Servicing Alignment Initiative, operations like yours are facing new demands on already strained operations. While you’ve been addressing gaps in default management, loan modification and foreclosure practices, as well as managing unprecedented default volumes, these new initiatives have thrown all eyes on the servicing industry and have proposed extensive operations changes.

Perhaps more than any other company serving mortgage lenders, servicers and investors, we understand the challenges these new requirements pose and what addressing each one will require of your organization. While they were designed to facilitate best practices across the servicing industry, they will likely require an extraordinary infrastructure overhaul to comply with:

  • More extensive and granular management oversight
  • Streamlined, auditable quality control
  • Loan-level operational transparency
  • Greater access to timely, relevant property and borrower data and analytics

It’s our belief that no other company can offer the industry insight and range of solutions we provide. Further, we believe that as the clock moves closer to the 60-day deadline, our experience, in-depth understanding, and extensive selection of servicing products and services will prove invaluable in meeting the federal deadline.

"These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations,"

-- John Walsh, Acting Comptroller of the Currency

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Default Servicing Reform

Rapidly deployed, servicer specific

Leveraging our extensive data assets and analytic tools, best-in-class workflow technology and scalable teams of default servicing experts, we are working with servicers to indentify gaps and develop tailored, client-specific solutions to help them address their specific consent order requirements by assisting in:

  • Developing comprehensive action plans
  • Improving their borrower communication
  • Establishing single points of contact for borrowers
  • Instituting robust oversight and controls over third-party vendors
  • Reviewing and auditing loss mitigation and foreclosure actions including comprehensive "look backs"

Though the language in the consent letters and initiatives vary slightly, all contain similar message and required changes, which fall into seven main categories:

  • Strengthened borrower communication
  • Careful oversight of all third-party vendors
  • Eliminating information silos that can result in unwarranted foreclosures
  • Completed documentation, including appropriately executed assignments
  • Adequate staffing to manage all processes and provide a single point of contact to borrowers
  • Loan modification denial and foreclosure reviews
  • Reasonable and allowable fees, charges and expenses imposed on borrowers

 

"These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations,"

-- John Walsh, Acting Comptroller of the Currency

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Investing in your servicing future

While we understand the need for rapid, decisive action given the timelines and associated changes, one of the many dangers in quickly responding to imminent deadlines is that reactive measures can be costly and difficult to maintain.

Consent Order Timeline

A sustainable short-term fix requires a long-range perspective, which is why we recommend a phased approach that also considers your desired future state. This long-range view allows you to take corrective actions that:

  • Align with future goals  
  • Minimize the risk of costly, dead-end solutions that will have to be replaced  
  • Allows simultaneous execution of process and technology changes  
  • Match current demands and can expand easily  to meet long-term needs   

As a support organization and partner, we are confident that we can help servicers not only comply with the mandates in the consent orders today, but, on a go-forward basis, enable them to:

  • Better manage timelines
  • Reduce errors
  • Increase the effectiveness of their operation

 

"These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations,"

-- John Walsh, Acting Comptroller of the Currency

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Let us help you develop your solution.
Fill out the form to be contacted. 

 

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