The Consumer Financial Protection Bureau’s consideration of a new set of rules to change how mortgage servicers interact with customers means that servicers will have to think beyond crossing t’s and dotting i’s.
Mortgage servicers can no longer just adhere to technology or check-the-box-type standards, Tim Burniston, senior director at Wolters Kluwer Financial Services, said Tuesday at SourceMedia's annual mortgage servicing conference under way in Irving, Texas. He said servicers' operations must shift to focusing on how their products, practices and processing affects consumers directly, an evolution that servicers aren’t used to and perhaps aren't prepared for.
The considered changes, released recently by the CFPB, include proposals to clarify billing statements and give advance warning of interest-rate changes and lender-placed insurance.
“They want a culture of compliance within the organizations that is very proactive and shows that you understand what the risks and issues are in your institution and that you’re reacting to them,” said Christina Speh, director of new markets and compliance strategy at Wolters Kluwer.
To achieve that customer experience, mortgage servicers will have to overhaul examination procedures. For example, the CFPB requires that regulated entities obtain and review scripts and recorded calls for telemarketing and collections, something that Speh said servicers never had to deal with in the past.
"Nothing is off the table," she said. "You can't rely on technical compliance to ensure that you've avoided unfair, deceptive or abusive practices."
Burniston said there’s a sense that borrowers who submit complaints to the CFPB are receiving good responses from the agency.
He said from Dec. 1 to Dec. 31, the CFPB received 2,326 mortgage-related complaints against depository institutions. Of those complaints, 21.5% dealt with issues such as loan servicing, while 38.2% dealt with loan modifications, collections and foreclosures, Burniston said. He said 19% of the complaints were closed with monetary relief to consumers.
“CFPB considers the customer the consumer, and we know this is a major shift with servicers because the banks they service the loans for were really the customer,” Speh said. “Now you must think about the consumer in everything you do and touch.”