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THE LATEST SERVICING Settlement Monitor Selects Secondary Law Firms T TWO NEW LEGAL PARTNERS HAVE BEEN APPOINTED TO SERVE THE OFFICE OF MORTGAGE SETTLEMENT OVERSIGHT. eyes and ears on the ground as the $25 billion servicer settle- ment grinds forward. The new secondary profes- sional firms—including BKD, LLP; Baker Tilly Virchow Krause, LLP; Crowe Horwath, LLP; Grant Thornton, LLP; and McGladrey, LLP—will assist settlement monitor Joseph A. Smith Jr. over the next three- and-a-half years. According to a release, each he Office of Mortgage Settlement Oversight recently chose five new firms to serve as its about alternatives and counseling resources if the new rate is unaf- fordable; early information and options to avoid foreclosure; and options for avoiding "force-placed" insurance, in which servicers purchase insurance to protect the lender's interest in the property. In addition, CFPB proposes a second set of rules to impose "common-sense" requirements for handling consumer accounts, correcting errors, and evaluating borrowers for options to avoid foreclosure. These rules include promptly credited payments; maintenance of accurate and accessible docu- ments and information; quick cor- rection of errors; and direct and ongoing access to servicer person- nel for delinquent borrowers. CFPB plans to finalize and implement the new requirements in January 2013. "Millions of homeowners are firm will assist BDO Consulting, a division of BDO USA, LLP, and the primary professional firm responsible for evaluating servicers Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. "Each secondary professional Servicers Preparing for firm has a high level of expertise that will bring the detailed, in- dependent attention we need to monitor this settlement," Smith said in the release. He said that he worked closely with BDO to select the final list of firms. "I am confident that these six accounting firms make up the blend we need to fully imple- ment the settlement," he added. Appointed by state attorneys CFPB's New Standards The government bureau sets a January 2013 implementation date for rules targeting homeowner protection. general, Smith leads the office as it oversees compliance by the servicers with terms under the historic settle- ment from earlier this year. He had said in past interviews with DS News and MReport that his office would select and appoint the primary and secondary professional firms later this year. T designed to protect homeowners from surprises or mistakes made by their mortgage servicers. CFPB first announced in April he Consumer Financial Protection Bureau (CFPB) proposed two notices with rules industry stakeholders, and government agencies for input. CFPB refined its earlier ideas in response to the feedback. The first set of proposed that it was considering several pro- posals to implement requirements laid out in the Dodd-Frank Act, the bill that created the bureau. The bureau reached out to consumer groups, small servicers, rules is designed to bring more transparency to the mortgage market so consumers can avoid costly surprises. CFPB proposes clear monthly mortgage state- ments, including a breakdown of payments, due dates, and fees; warnings before interest rate adjustments with information struggling to pay their mort- gages, often through no fault of their own," said CFPB Director Richard Cordray. "These pro- posed rules would offer consum- ers basic protections and put the 'service' back into mortgage servicing. The goal is to prevent mortgage servicers from giv- ing their customers unwelcome surprises and runarounds." The public will have until October 9 to review and provide comments on the proposed rules. CFPB will analyze the comments before issuing final rules. Mortgage Bankers Association (MBA) President and CEO David H. Stevens issued a statement in response to CFPB's release, applauding the bureau's com- mitment to "bringing certainty to our industry." However, he stressed the importance of uni- form standards for all servicers. "MBA will now begin the process of reviewing the proposed standards and will work to better understand their potential impact on servicers of all sizes and busi- ness models, as it is important that the final rules do not give prefer- ence to one business type over another, essential that they do not inhibit industry innovation or discourage new market entrants." " Stevens said. "It is also THE M REPORT | 51 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET