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32 LEGAL INDUSTRY UPDATE NATIONAL FOCUS Amber Todd, VP of Default Oversight, RoundPoint Mortgage Servicing Corporation, told DS News that "default servicing felt these impacts both before these unfortunate disasters, while establishing a successful proactive ap- proach, and after, when assisting our customers in their time of need, ensuring proper foreclo- sure moratoriums were in place and conducting the necessary inspections." e past year also saw no shortage of important legal and regulatory developments, ranging from nationally relevant shifts down to state-level changes and cases that could send ripples out through the industry. Todd singled out the challenges servicers faced related to Bureau of Consumer Financial Protection requirements that require peri- odic billing statements for customers in active bankruptcy status. "It is vital that the servic- ing system platform be as accurate as possible, reflecting accurate pre- and post-petition debts," Todd said. "We also had the revival of the Protecting Tenants at Foreclosure Act (PTFA) this year, which offers protections to bona fide tenants before proceeding with any eviction activity." Initially introduced in 2009, the PTFA contained protections intended to ensure that tenants facing eviction from a foreclosed prop- erty would have adequate time to find alterna- tive housing. e PTFA expired on December 31, 2014, but President Trump's signing of the Economic Growth, Regulatory Relief, and Consumer Protection Act last year also resur- rected the PTFA. Speaking to DS News last May, Richard M. Nielson, Managing Shareholder, Reimer Law Co., explained that the return of the PTFA could significantly increase the amount of time it takes to complete a post-foreclosure eviction. If that range was between 10–30 days before, for example, the reintroduced law could now require as much as 90 days' notice to "bona fide" tenants before they can be evicted. "It substantially increases the burden on mortgage servicers to comply with all the rules," Nielson said. LESSONS LEARNED With volumes remaining low and significant changes happening at the government level, what were the biggest takeaways from 2018 that the industry should carry into the new year? DS News asked a cross-section of industry professionals about what it takes to succeed in an evolving default landscape. "As the country continues to see record low volume, the concept of 'sustainable' downsiz- ing has been an important lesson," said Roy Diaz, Chair of the Legal League 100 and Managing Shareholder of Florida-based SHD Legal. What worked in the height of the crisis won't work when you're dealing with histori- cally low foreclosure volumes, and that impacts everything from how you do business to how to manage staffing levels. "Mortgage default volumes will likely never return to the kinds of numbers we saw several years ago," said Christianna Kersey, Compli- ance Attorney, Cohn, Goldberg & Deutsch. "Firms need to be more streamlined and efficient in order to provide the level of service clients expect." Compliance remains a primary challenge for both default servicers and their partner firms. When there are fewer files to deal with, and workforces are often scaled back to accommo- date that, it becomes all the more important to ensure that every i is dotted and every t crossed. "Over the past 10 years, our firm has devot- ed many resources to ensuring compliance with the law, client requirements, and best industry practices," said Adam E. Codilis, President, Codilis & Associates, P.C. "Continued reports of security breaches and industry regulatory actions in the past year have reinforced the value of this investment and a commitment to compliance and security." "It's about continuing to educate yourself on how those rules work in connection with our court system," Tromberg said. She explained that the confusion regarding the ever-evolving web of rules and regulations can cause confu- sion not just for servicers and attorneys, but even for the courts. "at confusion is compli- cating issues and giving rise to defenses that would not otherwise exist," Tromberg said. Legal League head Roy Diaz also cautioned that the court system itself is also changing in response to the lower foreclosure volumes. "Where the courts previously utilized 'foreclo- sure divisions' to manage volume, those divi- sions are now being dismantled," Diaz told DS News. "New judges are being appointed, many of whom have never tried or heard a foreclosure action. Cases and issues that seem simple and straightforward to those of us in the industry are foreign to some of the new judges, creat- "Servicers are scrambling to find loans. Investors are looking for loans. And the law firms are now chasing a smaller pool of files. Everyone is scrambling to keep their seat in the game of musical chairs." —John Ansell, Partner, Rosenberg and Associates

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