“A man who dares to waste one hour of time has not discovered the value of life.”
It’s unlikely Charles Darwin was thinking about mortgage servicing regulations when he wrote this—but the sentiment still applies.
Timeliness isn’t everything in today’s mortgage industry, but it’s pretty close. For reporting requirements in particular, timeliness can spell the difference between a quietly efficient operation and heavy fines. This is why it’s critical for servicers to have a vendor that’s equally committed to timeliness.
A vendor that is dedicated to timeliness has committed itself to being in sync with your operation and takes a proactive approach toward auditing. Indeed, being proactive is the only guaranteed way to meet the CFPB’s requirements for submitting timely reports.
Servicing QC demands are growing, now that the purchase market has rebounded. And the CFPB has made no secret of its intent to take a closer look at servicing activities. In its 2016 Fair Lending Report released earlier this year, the agency stated clearly it will be “increasing [its] focus on redlining, mortgage and student loan servicing, and small business lending.”
For servicers, there are a large number of issues to monitor, from robo-calls to force-placed insurance to how and when you reach out to borrowers who need help. As servicing volumes increase, so will the risk of failing to catch any issues before they develop into more serious problems.
For example, we have gotten a significant number of request from clients involving QC plans that address the most recent FHA requirements, including monthly audits that are required on all areas of FHA products. The CFPB is accutely tuned into whether certain players in the servicing industry are discriminating against FHA borrowers. In particular, they are taking a closer look at how efficiently servicers are handling complaints, especially when it comes to QWRs.
Because of these developments, The StoneHill Group has recently enhanced the depth of loan level QC we provide our servicing clients. In order to provide the additional scrutiny that is now required, we have also committed additional resources and added a number of experienced staff in our servicing division.
When choosing a servicing QC vendor, it’s important to ask for details about how they deliver timely reports and what their services include. Ideally, they should cover everything from delinquency statuses and reason codes to loss mitigation options, repayment plans, loan modifications and bankruptcies. A trusted servicing QC partner will not only safeguard servicers by being able to spot problems early, but they should also help identify cures.
Recently, the CFPB has filed suit against one of the nation’s largest servicers alleging a large number of servicing errors and unfair practices. While the ultimate outcome of this action remains unclear, what is clear is that the CFPB means business when it comes to servicing quality.