Authored by: Kristen Jolaoso and Andrew Litwin
Discussion and presentations at the Mortgage Bankers Association’s (MBA) National Mortgage Servicing Conference & Expo 2017 were heavily centered on regulation: existing, in process, and future. Part of that discussion was whether the regulators and rules would disappear with the Trump Administration’s deregulation push.
Regulations are here to stay
While most agree there might be changes to the regulations, and even potentially the regulatory bodies, the general consensus was that the existing rules would remain, at least in part, and that those rules would be enforced through a regulatory body in the future – whether that is the Consumer Financial Protection Bureau (CFPB) or state regulators.
When a straw poll was held during one session on whether the attendees thought the CFPB would be dismantled, no one rose their hand. Again, when asked if the all of the regulations brought on by Dodd-Frank would go away, no one rose their hand.
The future of regulation
The presenters agreed the purpose and end result of the rules is positive, but also that there is room for improvement. Ultimately, the servicers’ aim is to keep the borrower in the property. The regulations are intended to assist in this process and ensure best practices by the servicer. The most common theme discussed was a singular set of rules instead of the disparate regulations in place currently. This singular set of rules would simplify the overall process and reduce compliance costs as a result.
Regulations coming in October 2017
There are a set of regulations that will take effect in October of 2017. These new regulations include changes to provisions regarding:
- Successors in interest
- Servicing transfers
- Definition of delinquency
- Loss mitigation
- Periodic statements
- Early intervention
- Force-placed insurance and information requests
What servicers should do
First, servicers should ensure they are complying with the existing regulations. Don’t assume that the regulatory landscape has changed or that enforcement will not occur.
Second, organizations should prepare to be compliant with the new regulations that take effect in October. Review your company’s processes and consult with advisors on how you will be impacted.
Finally, companies need to stay up-to-date on changes to regulations. Consult with your financial advisors on a regular basis to ensure your organization stays abreast of developments.
For more information on this topic, or to learn how Baker Tilly servicing industry specialists can help, contact our team.