DS News

58 After the Pandemic." en, Five Star and Sourcepoint partnered for "e Human Touch: Why the Rise of Technology Still Requires Empathy." For this month's DS News cover story, we're bringing you a look at these topics with insights from representatives of both companies as well as Selene Finance, ServiceMac, and the Housing Policy Council. NAVIGATING THE REGULATORY LANDSCAPE Matt Douglas, VP of Mortgage Policy for the Housing Policy Council, noted that, despite the strong words and expectations, many regulators are industry veterans, and, therefore, can be understanding of the challenges servicers are facing in implementing those rules and timelines. However, Douglas suggests that there can be some disconnect between the different parties involved. "ere is a real understanding of what works, what doesn't, how long it takes servicers to implement things, the challenges, and how much detail it takes to be successful in operationalizing things. ere is a real dissonance between the veteran regulators who, when you're talking to them, are quite reasonable, and senior officials who maybe don't have that experience." Using the New York AG's letter as an example, Scott Holzmeister, ServiceMac SVP, notes that "It almost takes 90 days to interpret the [regulatory] letter, then you have to get your program and systems in line, write the requirements and get them installed so you can be ready to go." And that example is just one piece of the complex regulatory web servicers are currently adapting to navigate, Holzmeister added. Not only that, but over the last two years, regulators have issued numerous similar rules and guidelines, only to have those deadlines and benchmarks shift repeatedly as new variants emerged and it became clear that the pandemic's impact was not going to be resolved quickly. Among the complexities that servicers will need to deal with now are the exceptions, Holzmeister added. For example, what do you do if a borrower hits max terms and forbearance and has not resolved their hardship? According to FHA, you have to have your hardship resolved. If you've maxed your terms out, there is no additional forbearance help for you in that space. In the GSE space, Holzmeister suggested that if a customer has maximized forbearance, the servicer should submit a waiver request for additional time. "at's a tough place to be," Holzmeister said. "e whole purpose is to keep the customers in their home, and now you're having to walk that fine line. What's happening now is you have a customer who went 18 months into a forbearance. If you have to re-breach that customer, you are going to run into some short legal action timelines. You're going to have to have a 30- to 90-day period [but] you're going to have to wait for the breach letter to expire." Douglas noted that the CFPB is currently examining how regulatory and investor guidance will work for everyone's protection once moratoria and forbearances have all lapsed. e CFPB will closely examine if servicers took actions too quickly against delinquent borrowers. ere are currently close to 2 million loans in foreclosure and about a million loans in forbearance. THE INFLATION FACTOR A few months into 2022, one of the primary economic factors in play is rising inflation, with the Fed expected to raise interest rates at least four times this year, said John Vella, Selene Finance's Chief Revenue Officer. e first step in meeting this challenge is to ensure the proper technologies are in place to leverage remote work staff, Vella said. "In order to effectuate change, you have to be extremely good at it in this fluid environment." at means having the right communications, training, workflow, and supporting technology, as well as the ability to implement the solutions if they aren't already operational. is enables companies to have a full view of operations and to be on a level "If you don't have proper workflow, exception- based reporting, and rules engines with all of the different nuances, you will not be effective." —John Vella, Chief Revenue Officer, Selene Finance Cover Story By: Phil Britt

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