CFPB Servicing Standards-August 2013 Update

As a continuation of our monthly communications, we are updating you on our progress in meeting the January 2014 date for compliance with the CFPB’s National Servicing Standards.

Cenlar’s progress on each of the nine categories of the CFPB’s National Servicing Standards is outlined below:

    1. Billing Statements:
      We continue to work closely with our third party document vendor to plot additional data elements required to be on the billing statement. Borrowers presently on coupon/payment books will remain on them, unless they become 45 days delinquent, at which point they will be converted to billing statements. Once a borrower is on billing statements, they will not be able to switch back to coupon/payment books. We have received from our vendor an initial mock-up of the new billing statement that follows the format suggested by the CFPB. We are also working with them to provide us a mock-up of a statement for Bankrupt borrowers, per the CFPB’s broad requirement.
    2. ARM Notices:
      We have worked to ensure that our early disclosures meet CFPB requirements. We require our third party vendor to ensure new data required on ARM notices is available in the servicing system. Our third party vendor will have all field enhancements in place, by November 2013, at which point we will begin testing.
    3. Prompt Payment Crediting and Statements:
      Existing procedures are in place to effective date loan payments as of the date of receipt and within 5 business days when received in a non-conforming manner. Letters have been amended to ensure the address used is the conforming payment address provided to the borrower or member. In some cases, we had to remove our “overnight address” when it conflicted with the conforming payment address. Individuals will still be able to overnight a payment, but these types of payments are reviewed as non-conforming payments and effective dated, accordingly. As previously communicated, our payoff statement procedures are already compliant, since they are provided before the 7 day requirement and do not require changes.
    4. Forced (Lender) Placed Insurance:
      The CFPB requirements require that we first attempt to renew the borrower’s preferred policy, before we move to lender placed policy. As mentioned in the last update, our current letter timing is CFPB compliant, but the detail on the letters requires some changes. Our vendor has received our approved changes and has determined that we are in queue to have the changes live in October 2013. We are working with our vendor to determine any possibility of doing that sooner. Under our direction, our vendor is amending several disclosure documents.
    5. Error Resolution and Information Requests:
      As mentioned last month, we feel that we are already in compliance with the timing of the responses to both Qualified Written Requests (QWR’s) and error requests, however we are updating our procedures to mirror the process. We have compiled a list of what we believe are borrower documents that should provide an address to the borrower to submit a request and are in the process of updating those documents.
    6. Servicing Policies and Information:
      Using the CFPB definition of a servicing file, we have held ongoing meetings with various departments within Cenlar and with our vendors to assess options available in producing a servicing file to a regulator within 5 business days (the requirement to provide it to the borrower is within 30 days). We will assess the options presented and report our solution to you in the next monthly update.

Policies and procedures are being updated as necessary. And, we are also working with our third party vendor to ensure that we have a mechanism to provide the change of investor/owner information within 10 business days of the change.

  1. Early Intervention:
    As mentioned last month, much of what is required for this section is already being performed by our loss mitigation team. We are reviewing the process to ensure that it is well-documented.
  2. Continuity of Contact with Delinquent Borrowers:
    We continue to work through the details to ensure loans are assigned to the Loss Mitigation Call Center by day 45 of delinquency and that those loans will remain within the designated team, until a point in time that the borrower makes 2 consecutive payments. Routing discussions continue internally within our Telecom and MIS (IT) departments to finalize the routing parameters.
  3. Loss Mitigation:
    As mentioned previously, we are adjusting our timelines for review of complete application submissions as well as appeal submissions. We continue to review the process and will create new reports for implementation of appropriate controls for the new timelines. New disclosures are also being created for compliance purposes.

If you have any questions or concerns, please contact your Relationship Manager or Nancy Irwin, Vice President Client Relations at 609-883-3900 extension 2551.