CFPB Servicing Standards-Nov./Dec. 2013 Update

As a continuation of our monthly communications, we are updating you on our progress in meeting the CFPB’s National Servicing Standards that become effective in January 2014.

This past month, members of Cenlar’s senior staff presented a company-wide overview of the CFPB changes. Additional specialized training was performed in specific departments. We expect as we move into 2014 that there may be additional CFPB changes we make to further improve our service to you.

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

1. Billing Statements:
   1. We have finalized the format of the new Billing Statement and Coupon Book with our print vendor and can confirm that this new format is CFPB compliant.
   2. We have created a document “How to Read Your Loan Statement” which is intended to help a borrower understand changes made to their loan statement.
   3. For you, we have created a document entitled “Periodic Statements and Coupon Books Job Aid for Client” to guide you through the new CFPB complaint loan statements and coupon book we are issuing to your borrowers.
2. ARM Notices:
   Our disclosures meet CFPB requirements. Our third party vendor has ensured that all new data required on ARM notices has been met and we are completing final testing on the documents at this time. We have applicable internal tracking reports in place. Click here to view the new re-designed ARM Statements.
3. Prompt Payment Crediting and Statements:
   Mechanisms are in place to review and post both conforming and non-conforming payments within applicable timeframes. Documents were updated to ensure consistency in the conforming payment address. Additional enhancements in reporting capabilities, as a best practice, will be implemented in early 2014. Payoff statements and procedures did not require changes as they were already compliant since they are provided well before the 7 day requirement.
4. Forced (Lender) Placed Insurance:
   Under our direction, our vendor has amended several disclosure documents.
   As part of the CFPB requirements, we will first attempt to renew a borrower’s preferred policy before we move to a lender placed policy.
   To view samples of each notice please click on Lender Place Renewal Notice and Lender Place 2nd Notice.
5. Error Resolution and Information Requests:
   Cenlar confirms that we are currently compliant with this section. All borrower documents have been updated to include the same address for error resolution/dispute inquires. Policy and Procedures (P&P’s) have been updated. Our Regulatory Compliance area will perform ongoing testing to ensure compliance is maintained at all times.
6. Servicing Policies and Information:
   Using the CFPB definition of a servicing file, Cenlar is finalizing specific details to ensure that the location and storage of information related to the servicing file is available to a regulator or borrower within the specified time frame. We continue to enhance our requirements to receive all necessary servicing data from clients upon loan transfer. We continue final preparations with our image vendor to ensure imaged information is combined with system data, in order to provide a complete servicing file. An Acknowledgement Letter will be sent to borrowers when we receive a written request for the servicing file and a cover letter will be provided advising the status of the file, once it is reviewed in Quality Assurance (QA), prior to distribution to the borrower/CFPB.
7. Early Intervention:
   We implemented our process for sending out an early intervention letter. To view the early intervention letter click here “Early Intervention Notice Sample”.
8. Continuity of Contact with Delinquent Borrowers:
   Our employees have undergone training and we have successfully implemented all aspects of this process, with the exception of 1 call routing (IVR) routine, which is in testing. The 1 call routing routine allows authenticated borrowers to be placed in either the continuity of contact area, or open call environment, in concordance with the parameters of the IVR routine.
9. Loss Mitigation:
   Changes made to the loss mitigation procedures are being completed and are subject to final legal review. We have adjusted our timelines for review of complete application submissions, as well as appeal submissions. We have created a number of internal reports for implementation of appropriate controls for the new timelines. We continue to review and test these various changes on an “as completed” basis.

We are confident that we will meet all regulatory requirements in advance of the January 2014 deadline.

Should you have any questions or concerns, please contact your Relationship Manager.