In a general session Wednesday at the Mortgage Bankers Association’s National Mortgage Servicing Conference & Expo 2014, Steven Antonakes, deputy director of the Consumer Financial Protection Bureau cut straight to the point with a message the CFPB has been emphasizing lately.
Antonakes quickly shocked the room full of mortgage servicers in the opening session saying, "Nearly eight years have passed and I remain deeply disappointed by the lack of progress the mortgage servicing industry has made.
"There are encouraging signs with unemployment decreasing and the economy growing. However, many homeowners continue to struggle. Nationwide, one in ten homeowners remain underwater and two million households are at a high risk of foreclosure. Our work is far from over,” Antonakes said.
And while his brutal honestly came as quite a shock to the room, it is not a new message from the CFPB.
Back in December, I had the chance to meet with CFPB Director Richard Corday, who emphasized a similar point, it was just not in front of a giant room of servicers.
In this feature, which can be found in the latest issue of HousingWire Magazine, Cordray cautioned servicers saying, “There have been a lot of problems in that industry. I have seen them very close up when I was a public official in Ohio. It is important for them to take this very seriously and improve their performance and come into compliance with these rules.”
But that was just a light scratch compared to the tough message given by Antonakes Wednesday morning.
“Servicers have had more than a year now to work on implementation. We put out plain-language summaries of the rules and posted video guidance. We issued readiness guides. And, we worked with our fellow regulators to publish inter-agency procedures on the new rules to familiarize industry stakeholders with our expectations,” Antonakes said.
And while the CFPB is looking for a “good faith effort,” it has felt like “Groundhog Day” with mortgage servicing for far too long, Antonakes argued.
"Ultimately, these profound changes will be good for all Americans, including industry," Antonakes would later conclude. "But please understand, business as usual has ended in mortgage servicing. Groundhog Day is over."
Ultimately, Antonakes believes that needing the government to step in and intervene is quite bizarre. Yet here we are.
And Antonakes was not alone in this mindset either.
When I met with Joe Smith, monitor of the National Mortgage Settlement, he commented that Antonakes’ speech was well said.
Servicers have a right to be concerned. “But they need to understand that there is a reason that all this happened. It happened because of what happened in the last five years,” Smith noted.
Not all servicers fell under this severe assessment, as Antonakes did recognize that many servicers in the room have put in countless hours and spent millions of dollars preparing their businesses for the new rules.
“The Bureau has valued your input and engagement in the rulemaking and implementation process,” Antonakes said. “It’s that kind of investment in compliance that was sorely lacking in the response to the financial crisis and it speaks well of fundamental changes in the financial services industry in general.”