Bank superintendent Neiman stresses national mortgage servicing standard
Superintendent of Banks for the New York State Banking Department Richard Neiman made a resounding and familiar call for a national servicing standard Tuesday at the Mortgage Servicing Conference in Dallas, Texas. As the overseer of all bank and nonbank lenders in his state, as well as a member of the Congressional Oversight Panel and chairman New York's task force to deal with predatory foreclosure practices, Neiman said he has been in a unique position to see where the problems lie. Neiman stressed that it is not only important to set a national servicing standard, but absolutely necessary. "This is doable. There are enough models out there and we know the areas we need to address," Neiman said in response to HousingWire inquiry about the actuality of a national standard being put in place. A successful standard would be beneficial for consumers and the mortgage industry alike, Neiman claimed, because it will close gaps in the system for arbitrage as well as level the competition playing field. According to Neiman, provisional standards nationwide regarding data reporting must become a comprehensive requirement and follow the mortgage throughout the life of the loan. Other issues that need to be addressed include how to sustain loan modifications and responsibly handle unavoidable foreclosures, according to the New York official. Neiman believes the Consumer Financial Protection Bureau will be the organization to lead the national initiative to solve these problems. "The rules that they are going to issue will go toward banks and nonbanks," Neiman said. "Finally we have an entity that crosses those boundaries." Neiman said the servicer settlement being drafted by the 50 state attorneys general is not the basis for this national servicing standard; however, he agrees that it is a step in the right direction. Ultimately, he said, it's going to come down to a renewed level of cooperation between all moving parties at all levels — between states, state and federal financial supervisors, and federal agencies. "This type of Cooperative Federalism makes the highest use of the resources and expertise available, while minimizing any potential gaps in regulation," Neiman said. "By working together to set these best practices, we can restore the confidence of the public and investors." Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.