Mortgage Professionals Should be Optimistic About the Future

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10 | Th e M Rep o RT Charting a Course through Compliance Quandaries take 5 M // Compliance will still be the hot topic in 2015. What are the greatest concerns that clients need your help addressing? SteinMetz // You are right. Compliance is paramount today and for the foreseeable future. CoreLogic is working with cli- ents on a broad range of compli- ance issues, in both the servicing and origination functions. One example of what we're doing is our new approach to lien releases. If you tallied all the county, state, CFPB, and investor require- ments that affect lien releases, there are more than 1 million unique requirements that need to be tracked, managed, maintained, and adhered to nationwide. Today many servicers are still manually doing lien releases in-house—and this is exposing them to compli- ance problems, including, in some states, unauthorized practice of law (UPL) risks. Regulators, find- ing compliance issues in these areas, may raise questions regard- ing a client's overall policies and procedures and may even initiate a charge for unfair and deceptive practices. To address these concerns, we developed a lien release solu- tion that leverages compliance expertise and attorney relation- ships with automated compli- ance software to track, monitor, and store data and forms. The solution assists our clients in meeting the layers of current and future compliance require- ments; streamlines processes to minimize errors, reduces costs, and provides an audit trail to enhance transparency. M // The CFPB recently issued a bulletin warning mortgage servicers of potential repercussions if consumers are harmed when servicing rights change hands. What practices should servicers have in place to stay in compliance during servicing transfers? SteinMetz // Any point that servicers and consumers interact will be scrutinized by the CFPB. MSR deals and servicing transfers are in the crosshairs because there is the potential that distressed borrowers may fall through the cracks in terms of modifications, short sales, etc. Servicers, MSR sellers, and their consultants are taking extra precau- tions to eliminate the cracks, but first processes must be enhanced to make sure that the original liens, subsequent assignments, and other related documents have been recorded properly. We work closely with a number of major banks to help assure that documentation is in order prior to the transfer. As I mentioned earlier, the everyday handling of lien releases in a compliant and timely manner is another area where the interests of the consumer, the servicer, and regulators intersect. M // The final version of Regulation X went into effect in January 2014. Now a full year later, what has the cumulative effect been on the servicing industry? SteinMetz // Regulation X has changed the way servicers are dealing with borrowers, which has had major implications on communications, workflow, and processes. As you would expect, it has certainly heightened the concern over compliance. The cumulative effect has been that servicers have spent hundreds of millions of dollars on compliance, workflow redesign, and technology to assure that they are not only complying with the regulation but can also document such compliance. With the cost of servicing going up and the reputational risks associated with servicing increasing, major bank servicers are rethinking their commitment to servicing. M // With three decades in the industry, how have your previous experiences prepared you for your current role? SteinMetz // I am fortunate to have broad experience in the industry spanning everything from retail and third-party originations to servicing, which includes default and loss mitigation. This broad experience has given me a great deal of insight into the needs of lenders today. I understand the everyday challenges that manag- ers face in both originations and servicing, and we at CoreLogic are committed to providing clients the solutions that make their difficult jobs easier. Today, more than ever, lenders need their vendors to be able to solve their complex issues and be a partner they can trust. M // What's ahead for CoreLogic in 2015? SteinMetz // Compliance and regulatory issues are only going to increase in 2015, and staying current in that environment will require significant and ongoing investments in systems, processes, people, and data. As a service provider to the industry, we are preparing and taking the steps necessary to be ready for any and all changes. CoreLogic has invest- ed in a comprehensive compliance infrastructure and process, which includes a dedicated enterprise- level compliance team focused on researching regulatory require- ments and identifying applicabil- ity to our products and services. Specific to the lien release solu- tion, we provide servicers a method to track releases, manage vendors and prove compliance in one comprehensive database. In addition, we will continue to invest in our data and analyt- ics, which allow us to develop solutions that streamline workflow and solve pain points for mortgage lenders and servicers, capital mar- ket investors, and real estate sales professionals. The three most important issues the mortgage industry faces in the new year are compliance, compliance, and compliance. Bill Steinmetz, CoreLogic's vice president of document solutions operations, discusses the ways in which he and his company are providing clients with the information they need to succeed in the current regulatory environment. "If you tallied all the county, state, CFpB, and investor requirements that affect lien releases, there are more than 1 million unique requirements that need to be tracked, managed, maintained and adhered to, nationwide."

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