The new Consumer Financial Protection Bureau (CFPB) rules, plus a flood of municipal and state level compliance statutes, are testing the mettle of mortgage servicers and their compliance management systems. One area of concern: Servicers worry that potential compliance problems relating to their default properties may go undetected and unaddressed, especially where key aspects of the servicing process are handled by independent field service providers.
It’s a classic dilemma: Servicers are accountable for compliance failures but often lack the visibility and control they need to prevent them. The first and arguably most important step in addressing this problem is to critically assess your provider’s own compliance readiness. Does your field services partner have the specialized knowledge, processes, technology and on-the-ground resources needed to effectively neutralize compliance risk?
Knowledge:Today’s compliance challenges are complex: To meet them, field service providers must be able to demonstrate complete understanding of compliance issues at every level. Formal systems must support continuous monitoring of investor and insurer information sources, as well as those of state and municipal regulatory authorities. Smart intelligence gathering isn’t enough ? rule changes must be integrated into the provider’s operating system and communications network, with appropriate event tracking and reporting to provide an ongoing record of compliance.
Process:Compliance is an extension of the quality control process. As with all QC measures, assured compliance starts with clear, unequivocal standards directly linked to required actions and performance metrics. Your field services partner should be able to demonstrate formal compliance processes and procedures covering every service category as well as each service event. A strong QC performance record is a key measure of compliance readiness.
Targeted Technology: Technology plays a major role in navigating the increasingly complex web of federal, state and local default property regulations. It takes a range of complementary solutions, each compliance-optimized for a specific default servicing requirement or task. One example ? property conveyance software that helps servicers eliminate potentially costly compliance problems while increasing the value of their FHA/HUD mortgage assets.
On-The Ground Resources: Your partner’s field service team provides the front line warriors on the compliance battlefield. They can be your strongest asset or most troublesome liability. How are team members vetted? Trained? What tools are they provided? What standards are they required to meet? Do they provide the geographic coverage you need? Are they an integral part of the communities and neighborhoods where your properties are located? Answers to these questions will give you a good start in assessing your field service provider’s compliance readiness.
About The Author
Joseph Badalamenti (Joe Bada) got his start in the default management industry in 1967 as a HUD contractor. Now, 43 years and over 5 million inspections later, Joe has built Five Brothers into a highly successful and respected industry leader offering a full range of default management services and technology solutions. His strong belief in client-centered partnering has spawned a nationwide network of highly effective customer and field service professionals. Advanced technology solutions created under his leadership the industry’s first web-based workflow management system, FiveOnline, a complete document management and processing system (MARS), state-of-the-art loss mitigation software (MOTZ), which allows quick and efficient loan modifications according to FDIC and HAMP guidelines, automated document storage/workflow management software (IntelliStorage) and HUD claims processing system (ClaimSys). Joe remains an advocate of client-specific business solutions, an approach he believes is Five Brothers’ most important competitive advantage.