Leveraging NMS
Standards/CFPB Regulations
Michael Lecaroz
Counsel to HomeCorps
© 2014 Office of Massachusetts Attorney General Martha Coakley
Overview
The Rules
• Consumer Financial Protection Bureau
• Regulation X- 12 CFR 1024 (RESPA)
• Regulation Z- 12 CFR 1026 (TILA)
• National Mortgage Settlement, Exhibit A
• BofA, Wells Fargo, Chase, Citi, GMAC
• Ocwen Loan Servicing
• Massachusetts Division of Banks
• 209 CMR 56.00:Foreclosure Prevention Options
• 209 CMR 18.00:Conduct of the Business of
Debt Collectors and Loan Servicers
© 2014 Office of Massachusetts Attorney General Martha Coakley
Overview
The Loan Modification Process
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Postponing Foreclosure Sales
Submitting the Application
Communicating with SPOCs
Receiving a Decision
Completing a Trial Payment Plan
Responding to a Service Release
© 2014 Office of Massachusetts Attorney General Martha Coakley
Overview
Tracking
• Focus on helping homeowners, but also
track violations
• Create Violation Spreadsheet
• 6 Categories
• 3 to 4 sub-categories
• Collect related information, i.e., names of
SPOCs, Investor
• Communicate this information to servicers
© 2014 Office of Massachusetts Attorney General Martha Coakley
Postponing Foreclosure Sales
• Prohibition on referring/scheduling sale date
• Complete package within 120 days of delinquency
• Complete package within 30 days of referral
• Best practices
• Determine from servicer if referral made
• Use document collection mistakes to delay referral
to foreclosure or scheduling sale date
©2014 Office of Massachusetts Attorney General Martha Coakley
Postponing Foreclosure Sales
• Prohibition on completing sale
• Complete package within 37 days of sale date
• Submitted documents within 30 days of last MIL
• Expedited review if complete package 15 days prior
to sale
• Should follow investor guidelines for late packages
• Best Practices
• Ask for Name of Investor
• Explain what homeowner has done to submit
package
• Submit as complete a package as possible
© 2014 Office of Massachusetts Attorney General Martha Coakley
Submitting the Application
• Timeline
• Missing items letter within 5 business days
• Documents honored for 90 days
• Decision within 30 days of complete
application
© 2014 Office of Massachusetts Attorney General Martha Coakley
Submitting the Application
• Best Practices
• Ask for prior missing items letters
• Ask servicer to use reasonable business
judgment for exceptions
• Understand the homeowner’s income and
servicer’s loan modification waterfall
• Understand difference between SPOC,
underwriter, etc.
© 2014 Office of Massachusetts Attorney General Martha Coakley
Communicating with
SPOCs
• Communication
• SPOC must be reasonably available
• SPOC must communicate with 3rd parties
• Best Practices
• Develop working relationships with SPOCs
• Confirm documents, confirm who is looking
at documents
• Understand what SPOCs do at each
servicer
© 2014 Office of Massachusetts Attorney General Martha Coakley
Communicating with
SPOCs
• SPOCs must give accurate information
• Best Practices
• Confirm which department is asking for
information or giving information
• Explain why homeowner is confused
• Ask questions, make requests, listen
• Understand what SPOC is going to do next
© 2013 Office of Massachusetts Attorney General Martha Coakley
Receiving a Decision
• NMS Servicers and “certain mortgages”
must offer reasonable, NPV positive
modifications
• Must document specific reasons for denial
• Must identify investor and restrictions
• Best Practices
• Do your own waterfall
• Ask for verified income number
• Ask for unpaid principal and arrearage
© 2014 Office of Massachusetts Attorney General Martha Coakley
Receiving a Decision
• Must review for imminent default
• Should assist recovered hardship
• HAMP Tier 2
• Straight Cap
• Repayment Plan
• Best Practices
• Do your own underwriting
• Advocate based on hardship
• Make very specific requests
© 2014 Office of Massachusetts Attorney General Martha Coakley
Completing a Trial Payment
Plan
• NMS Servicers must promptly convert to
permanent successfully completed TPP
• Servicer must give extra time for nonpayment requirements
• Servicer must provide countersigned within
45 days
• Servicer must not add waiver of liability
© 2014 Office of Massachusetts Attorney General Martha Coakley
Completing a Trial Payment
Plan
• Best Practices
• Keep copy of trial offer
• Confirm all 3 payments
• Ask about bankruptcy, second liens, insurance,
co-borrowers
• Ask monthly for copy of permanent agreements
• Ensure that agreement is properly notarized
• Confirm permanent payment is same as trial
payment
• Keep copy of countersigned documents
© 2014 Office of Massachusetts Attorney General Martha Coakley
Responding to a Service
Release
• NMS Servicers, must honor all trials and
permanent modifications
• All servicers must ensure that all documents
and information is transferred
• Best Practices
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Ensure new servicer is speaking with old servicer
Send new servicer copy of trials and agreements
Advise homeowner to save rejected payments
© 2014 Office of Massachusetts Attorney General Martha Coakley
• Questions?
© 2014 Office of Massachusetts Attorney General Martha Coakley