DS News

10 Michelle Garcia Gilbert has practiced real estate and business law in Florida since 1989, specializing in default servicing legal work, including litigated foreclosures, real estate closings, evictions, and commercial litigation. She works closely with the default industry by speaking at webinars and at conferences, and writing for industry publications, as well as consulting on various issues relevant to the industry. She was selected as one of MReport's 2015 and 2018 Leading Ladies and was most recently named DS News' 2019 Top 25 Women of Law. She has managed Gilbert Garcia Group's expansion into probate, estate plan- ning, business transaction, and corporate law, and she also oversees Sapphire Title & Escrow Company, launched in 2015. She received her bachelor's degree in journalism from the Uni- versity of South Florida, and her juris doctor- ate degree from the University of Notre Dame. She volunteers on nonprofit boards serving children and women, and with her church, as well as supporting private schools provid- ing educational opportunities to underserved communities. DS News recently spoke to Gilbert at the Five Star Institute's Legal League 100 Spring Summit, where she discussed the state of the industry, challenges, trends, upcoming court cases, and how technology will impact the industry moving forward. WHAT ARE THE BIGGEST CHALLENGES CURRENTLY FACED BY SERVICERS OPERATING IN THE DEFAULT SPACE, AND FOR THE LAW FIRMS THAT ASSIST THEM? "Probably the cost of default servicing and shrinking profit margins. It costs more to service a defaulted loan due to compliance and regulation requirements. Some go south and get dismissed and have to be refiled, and that's the cost of doing business. Volumes are low, but the fees are also low compared to traditional law firm practices. Firms have to learn how to run lean and mean in order to stay in the black, hopefully make a profit, and hold on until they are in a more profitable state. THE SUPREME COURT RECENTLY RULED IN THE CASE OF OBDUSKEY V. MCCARTHY HOLTHUS. HOW IMPORTANT WAS THAT CASE AND WHAT LARGER IMPACT COULD IT HAVE ON THE INDUSTRY LANDSCAPE? e Obduskey case held that, in a non-judicial state, a law firm is not a debt collector. at ruling addresses those facts and that particular type of firm and state, but would the concept apply to judicial states and law firms within that space? While some of us do consumer collection work, what we do in the foreclosure space is not what you consider to be debt collection: calling the borrower, trying to get them to pay—it's strictly the action to foreclose the lien. HOW IS TECHNOLOGY CHANGING THE WAY YOU DO BUSINESS AND INTERACT WITH SERVICERS AND BORROWERS? Technology is a great, untapped resource for default servicing. With the regular servicing of non-defaulted loans, servicers and lenders are using the technology to make it a seamless transaction for that borrower. ey can do everything electronically, manage their loan, and communicate with their servicer. e default space is different, and it's a case-by-case basis. Eventually, they're going to determine how to use technology best—utilizing technologies such as blockchain to improve efficiency, cut down on costs and the overhead, and generally streamline everything. However, I think default servicing will lag a little behind regular servicing simply due to the nature of the individual borrowers. WHAT TRENDS OR CHANGES DO YOU SEE WITHIN THE INDUSTRY AS WE HEAD TOWARD 2020? Whenever things are slow, whenever there are low volumes within default, that's an opportunity to innovate, to look at your tech in the law "With the regular servicing of non-defaulted loans, servicers and lenders are using the technology to make it a seamless transaction for that borrower. ey can do everything electronically, manage their loan, and communicate with their servicer. e default space is different, and it's a case-by- case basis." COUNSEL'S CORNER LEARNING LESSONS FROM DIVERSE COURT CASES Michelle Garcia Gilbert Managing Partner, Gilbert Garcia Group, P.A.

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