The Psychology Behind the Recovery

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Th e M Rep o RT | 47 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SERVICING The laTesT avoiding data disasters Servicers nimbly adapt to new rules by ramping up data aggregation efforts. i f you haven't reviewed the upcoming regulation changes from the Consumer Financial Protection Bureau, better put on a big pot of coffee. Effective January 10, the rules have changed, and this includes amendments to the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z). The rules affecting several areas of mortgage servicing have been revised. So, which areas have changed? (It might be sim- pler to ask which areas haven't changed.) Here's a partial list of what has been revised: Regulation X • Error resolution and informa- tion requests • Force-placed insurance • Early intervention on delin- quencies • Continuity of contact with borrowers • Loss mitigation procedures • Mortgage servicing transfers • Escrow accounts • General policies, procedures, and requirements Regulation Z • Periodic statements • Interest-rate adjustment notices • Prompt payment crediting and payoff payments The CFPB included an exemp- tion for companies that service 5,000 or fewer mortgage loans, but for the many mortgage servicers subject to the bureau's regulations, they are using these rule changes as an opportune time to overhaul their entire systems of data entry, rework internal procedures for loan ap- provals and reviews, and reassess staffing allocations. According to Greg Lehman, product manager for enterprise content management at Fiserv, Inc., when it comes to maintain- ing compliance with the new regulations, financial institutions should be especially mindful of information management and data integrity. He highly recommends switch- ing from manual data entry to standardized, automated systems for the purpose of ensuring ac- curacy. Sophisticated information management systems can help with the complexity and chal- lenges of completing the loan process through multiple phases and systems. "[E]nsuring the accuracy and consistency of stored data is often one of the biggest challenges for loan servicing," according to Lehman. In a recent post to Fiserv's "The Point" blog for the financial services industry, Lehman wrote, "When loan files and histories were examined in the aftermath of the mortgage crisis, discrepan- cies were often found that made it nearly impossible to under- stand systems and decision-mak- ing processes. In light of new regulations created in response, it's especially important to ensure the accuracy of the loan file and maintain a comprehensive loan record that includes all signed legal documents." Lehman stressed that automated systems take manual entry and its inherent risks out of the equation. A comprehensive information management system can capture and retain content, compare and route data, and streamline approv- als, as well as track documents to minimize loan processing time, Lehman explained. It can also boost efficiency with a leaner staff, and if there's ever an audit, the process is greatly streamlined with more accurate records and archived documents, he notes. Loan servicers that make it a priority to stay current with technology, Lehman said, will be better equipped to adapt to this fundamental shift in how mortgage lending and servicing is done and can expect to increase customer satisfaction and enhance profitabil- ity, all while minimizing risk. DALLAS, TEXAS THE LARGEST EVENT IN SERVICING IS THE ULTIMATE NETWORKING EXPERIENCE SEPTEMBER 14-16, 2014 COMPLIANCE | FORECLOSURE | INVESTMENT | PROPERTY MANAGEMENT | REO | SERVICING STAR SPONSORS LEADERSHIP SPONSORS HOSTING SPONSOR REGISTER BY MARCH 31ST FOR OUR BIGGEST SAVINGS OF THE YEAR! fsc2014_Ad.indd 1 2/26/14 11:40 AM

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