CFPB Servicing Standards-October 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 January 2014.

Cenlar continues to make positive progress on each of the nine categories of the CFPB’s National Servicing Standards as is evidenced below:

1. Billing Statements:
   We have finalized the format of the new billing statement with our print vendor. We are in the process of creating an insert that will be included in the mailing of the new billing statement. This insert will help borrowers understand why they are receiving a billing statement instead of a coupon book. It will list the changes and or reasons for receiving a billing statement instead of a coupon book.
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 will begin our testing on these enhancements the first half of November. We are also in the process of creating a new ARM Report for tracking loans.
3. Prompt Payment Crediting and Statements:
   We are pleased to announce that we are compliant with the CFPB requirements. We are currently working on a related project to enhance reporting capabilities for the cash and loss mitigation areas, but compliance is not contingent upon completion of the project by January. We are currently in the process of developing a testing plan for the reporting capabilities enhancement and will work towards a late December completion of such testing. And, our payoff statements procedures are already compliant since they are provided well before the 7 day requirement and do not require changes, though we have not yet formally closed out any items from the project plan.
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. We plan to review the remaining draft letters from our vendor over the next two weeks. Then, testing of the procedure will occur.
5. Error Resolution and Information Requests:
   We have reviewed all borrower documents that provide an address for borrowers to submit a Qualified Written Request (QWR) or an error inquiry to ensure that the address we provide is uniform across the board. We believe that we are already compliant with the timing requirements and are in the process of developing testing plan to be able to ensure compliance.
6. Servicing Policies and Information:
   Using the CFPB definition of the servicing file, Cenlar is working to ensure that the location and storage of such information can be made available to a regulator or borrower within the specified time frame. We are enhancing our procedure that requires complete data from clients upon loan transfer. We are working with our image vendor to finalize how imaged information will be combined with system data, in order to provide a complete servicing file. Acknowledgement letters and cover letters for the servicing file have been created.
7. Early Intervention:
   We will be finalizing our review of the “45 Day Letter” and will then complete creation and testing of the exception report that will be used to track applicable loans. We are completing updates to our documented procedures.
8. Continuity of Contact with Delinquent Borrowers:
   Training continues to ensure that employees associated with this process can answer questions related to the subject matter specified by the CFPB. Testing will be performed to ensure the routing of borrowers is properly queued, once the caller exits the IVR.
9. Loss Mitigation:
   Changes are required for some of our loss mitigation procedures. We have adjusted our timelines for review of complete application submissions as well as appeal submissions. We are also working to create a number of new reports for implementation of appropriate controls for the new timelines. New disclosures are also being created for compliance purposes. We plan to test these various changes on an “as completed” basis.

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