NY Banking Dept Reaches Servicing/Foreclosure Practices Agreement with Goldman, Litton, Ocwen

New York's Department of Financial Services and Banking Department entered into an agreement with Goldman Sachs Bank, Ocwen Financial Corp. and Litton Loan Servicing LP regarding certain servicing and foreclosure practices.

A copy of the Agreement on Mortgage Servicing Practices is available at:

http://www.ins.state.ny.us/press/2011/p1109011_Ocwen_cond_appr_final_sig.p

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As part of the Agreement, Goldman Sachs will write down approximately $13 million in unpaid principal, consisting of forgiveness on 25 percent of the principal balance all 60-day delinquent first-lien home loans in New York serviced by Litton and owned by Goldman Sachs and its subsidiaries as of August 1, 2011.

The Agreement is a condition of Ocwen's acquisition of Litton, and does not preclude any future investigations of past practices or release any future claims or actions.  In addition, if any party to this Agreement agrees with any other regulator to adopt greater consumer protections or other more rigorous standards than are contained in this Agreement, such other provisions shall be applicable to the party.

Among other things, the Agreement requires servicing and foreclosure practice changes in the following areas:

- Document execution

- Accuracy of documentation

- Standing to foreclose

- Identification and contact information of the note holder, and account/payment history, on request

- Compensation to borrowers, and voiding of third-party sales, in all wrongful foreclosures

- Regular quality assurance audits of foreclosure and bankruptcy proceedings

- Oversight of third-party vendors

- Adequate staffing and training

- Single-point-of-contact notices and related requirements

- Toll-free number set up for new loans upon acquisition or transfer of servicing

- Modification notices

- Independent review of loan mod denials

- Complaint handling and resolution procedures

- Limits on attorneys fees, late fees and delinquency charges, property valuation fees

- Limits on lender-placed insurance

Ocwen and Litton must implement these requirements within 60 days following the acquisition. Goldman, which is exiting the mortgage servicing business with the sale of Litton, has agreed to adopt these servicing practices if it should ever reenter the servicing industry.

SERVICING ALIGNMENT INITIATIVE AND HAWAII LEGISLATIVE CHANGES AFFECTING NON-JUDICIAL FORECLOSURES

http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1111.pdf


http://www.dsnews.com/articles/freddie-mac-details-new-default-servicing-requirements-2011-06-30

Office of the Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) is issuing guidance to communicate the OCC’s expectations for the oversight and management of mortgage foreclosure activities by national banks
http://www.occ.gov/news-issuances/bulletins/2011/bulletin-2011-29.html

The Office of the Comptroller of the Currency issued guidance (OCC Bulletin 2011-29) to its regulated entities as to its expectations regarding the oversight and management of mortgage foreclosure activities.

The guidance does not address detailed mortgage servicing requirements, or broader issues related to working with troubled borrowers, which the OCC indicates will be addressed at a later date.

The guidance is available at:

http://www.occ.gov/news-issuances/bulletins/2011/bulletin-2011-29.html


As you may recall, the OCC previously issued the results of its "Interagency Review of Foreclosure Policies and Practices" in April of 2011. A copy is available at:

http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47a.pdf


Among other things, OCC Bulletin 2011-29 provides additional clarification regarding adequate staffing and training, dual-track processing, management of affidavit and notary practices, documentation, oversight of third-party service providers, and adherence to all laws and regulations related to mortgage foreclosure.

The bulletin also requires all OCC-regulated entities to conduct a self-assessment of foreclosure management practices no later than September 30, 2011 and to correct any weaknesses identified. According to the OCC, national bank examiners will review the self-assessments and corrective actions in the next quarterly review or examination.

New Rules for Mortgage Servicers Face Early Criticism

Federal banking regulators have not officially imposed their new rules for the top mortgage servicers, but a wide coalition of consumer and housing groups is denouncing the legal agreements, which are likely to be published within a few days, the New York Times reported today. The new rules require the servicers to improve their processing systems, to stop foreclosing while negotiating to modify the loan and to give borrowers a single direct means of contact. Servicers will be required to bring in a consultant to investigate complaints by homeowners who lost money because of foreclosure processing errors in 2009 and 2010. The problem, said Alys Cohen of the National Consumer Law Center, is the agreements "do not in any way require the servicers to stop avoidable foreclosures, and that is what we need." At the heart of the complaints by Cohen and others is whether the servicers, which are arms of the biggest banks, may be compelled to give households fighting foreclosure a better shot at renegotiating their loans and staying in their properties

http://www.nytimes.com/2011/04/11/business/economy/11foreclose.html

Are You Up To Speed On The New Regulations?

Are You Up To Speed On The New Regulations?


in From The Orb > Required Reading

by Sue Sroka on Wednesday 10 November 2010

REQUIRED READING: Did you know that earlier this year, a mortgage banker made a $1.25 million settlement with the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) following an examination of compliance with federal and state consumer protection laws? Not keeping up with regulatory changes can put a deep dent in your reputation - if not put you completely out of business!

Loans that hit your desk with regulatory issues, incomplete packages and erroneous pricing are unacceptable in today’s environment. Now, more than ever, it is crucial to understand exactly what is happening from the time an application is taken, through underwriting, pre-funding quality control and closing. Additionally, you need to question how your staff operates - and if anyone on your staff explains their actions by saying, "Because we have always done it this way," you should toss out the yellow flag while shouting "Foul!" at the top of your lungs.

Admittedly, there has been an avalanche of new regulations and requirements coming from federal and state levels. Many mortgage banking executives are struggling to get their employees to think differently about the lending process and to embrace change. This can be difficult, because many executive themselves do not quite understand what needs to change.

If any of this sounds familiar, it is an excellent idea to immediately update your written corporate policies and prepare for resistance. This will help clarify any ambiguous issues and force you to re-evaluate how your operation should be working.

Then, check the technology that you are leveraging to ensure that it is configured to support your policies. Many systems available today are highly configurable, but lenders need to invest some time to actually configure them. This may sound strange, but there are still too many lenders who are in the market for a new technical "miracle solution," - when, in fact, the product they already have installed just needs to be configured to meet their current business needs.

In this area, it is important to work with your lending system vendor. Any vendor worth its salt is eager to give guidance that will benefit its clients' secondary operations. Then, make sure that you invest the time to train your staff - this should be a key component of any risk-management strategy.

The acronym parade

The key areas that need to be updated in your policy documents include the Home Valuation Code of Conduct (HVCC), the Real Estate Settlement Procedures Act (RESPA), the Mortgage Disclosure Improvement Act (MDIA) and the state examinations.

People have been grumbling about HVCC rules for more than a year. Now, the Subtitle F of the Mortgage Reform Act (Title XIV of the act) addresses appraisal activities, with new rules that have provisions to abolish HVCC with a new interim final regulation. Having your current procedures clearly documented will make it easier for you to adjust quickly to the new rulings going into effect shortly.

As for RESPA, those regulatory changes have been the bane of our industry this year. One of the key elements driving lenders crazy is the conflicting information we have been receiving from various regulatory agencies. There is also the matter of the vague language within RESPA that is left up to interpretation.

Regarding RESPA, it is vital to determine if your technology can easily support your workflow. In some automated solutions, there are alerts that notifies you if closing dates are outside of the regulatory requirements. If your platform does not support this type of functionality, how clearly have you documented your manual work-around processes so that new hires will be doing their job without putting your company at compliance risk?

MDIA is another regulatory change that has most certainly had an impact on your internal processes. At one time, it was a mild and mostly benign inconvenience - but borrower disclosures are now an integral element of a compliant loan. Not only does MDIA set new rules around the timing of when disclosures need to be sent to borrowers, but it also changes which loan programs and purposes are being regulated differently.

But that's just the federal concerns. The states are also party to this issue. If you are not up to speed on what your state regulators are demanding, you need to get cracking on that knowledge gap ASAP.

It is of no value to a lender to have originators failing their state examinations. Although these exams are expensive and tedious to manage, their quality-control measures can ultimately protect your company.

From a policies and procedures perspective, the impact of state exams should definitely change how you do business - especially if you lend in multiple states. The multistate examination process is a collaboration of two state regulators: CSBS and AARMR. Together, they have embarked upon a comprehensive initiative to modernize mortgage lending regulatory practices. Not only are they establishing consistency across all states relative to what gets looked at in an audit, but they are also sharing their findings.

Niccolo Machiavelli once wrote, "There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things." In today's evolving regulatory environment, change will not come easy or fast. However, the industry cannot procrastinate when it comes to meeting the new requirements and understanding the new guidelines. Without having the correct operations policy in place, this task will be more difficult than it needs to be.



Sue Sroka is vice president of client services for Del Mar DataTrac, based in San Diego. She can be reached at (858) 550-8810.

Mortgage Banker Production Profits Narrow Further in Q1 2010

Profit margins for independent mortgage bankers and subsidiaries continued to fall in the first quarter of this year, as production volume declined and production operating expenses rose, the Mortgage Bankers Association (MBA) reported Tuesday. According to MBA's quarterly survey, independent mortgage bankers and subsidiaries made an average profit of $606 on each loan they originated in Q1, down from $890 per loan in the fourth quarter of 2009 and substantially lower than the $1,088 average profit recorded one year ago.



http://www.mortgagebankers.org/default.htm

Chase Plans Foreclosure-Prevention Events In Eight Markets

By MortgageOrb.com on Thursday 06 May 2010

Chase says it will host multi-day homeowner assistance events for struggling Chase homeowners in eight major U.S. markets this year. The events complement 51 Chase Homeownership Centers that the company has opened throughout the country.

"We have increased borrower participation dramatically by concentrating our reach-out efforts and bringing together dozens of Chase loan counselors for several days," says Dave Lowman, head of home lending at Chase.

Over the next five months, up to 40 Chase counselors will work with homeowners for as long as 12 hours a day for four or five days in a central location, such as a civic center or community college.

Many of the counselors are based in the company’s homeownership centers, which Chase began opening in early 2009 to provide face-to-face counseling to homeowners who have fallen behind on their mortgages. The centers are open six days a week, including evening hours.

Chase began the multi-day events in Florida, where counselors met with 3,200 customers. Half of the homeowners spoke with counselors in less than 10 minutes, and a total of 85% waited no more than 30 minutes before speaking one-on-one with a counselor, the company says. Nearly three-quarters of the customers said their experience was excellent, while another 12% said it was very good.

"The centers have provided personalized help to more than 91,000 borrowers, and we expect these events will help thousands more in just a few days,” Lowman says.

Chase plans to host events in the Chicago; Atlanta; Washington, D.C.; New York; Northern and Southern California; Orlando, Fla.; and Phoenix markets.

Since 2009, Chase has hired 3,600 additional counselors, hosted and participated in nearly 475 outreach events, and mailed more than 1 million letters to invite customers to events and centers.