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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 44 October 2023 F E A T U R E S T O R Y WITH HELP, SERVICING COMPLIANCE CAN GET EASIER Regulatory oversight has become a fact of life for mortgage servicers, and staying compliant requires a robust risk management framework. B y T O B Y W E L L S I n today's rapidly changing regula- tory landscape, mortgage servicers find themselves facing a myriad of compliance challenges that grow more complex by the day. The Consumer Financial Protection Bureau (CFPB) has been particularly active in its oversight and enforcement of mortgage servicing operations, with a specific focus on issues such as junk fees and debt collection. Compliance is particularly important for lending organizations that are relying on servicing revenue in the sluggish orig- ination market. To navigate these increas- ingly demanding requirements, many are turning to an experienced subservicing partner for compliance expertise so they can focus on their core business. But how exactly can a subservicer help? Understanding Today's Challenges S ervicers currently find themselves under a tremendous amount of regulatory pressure. The CFPB is just one regulatory agency that oversees servicers, but the Bureau has been particularly busy in taking enforcement actions against organizations that fail to meet federal requirements. Over the past year, for example, the CFPB has targeted several servicers for violating the CARES (Coronavirus Aid, Relief, and Economic Security) Act by misleading customers who sought for- bearance assistance, failing to accurately represent their options, and asking for more information than borrowers were required to share. According to recent CFPB regulatory bulletins, the Bureau has also taken an increasingly strong stance against "junk fees," including fees charged to borrowers seeking forbear- ance and phone payment fees that were not properly disclosed. In addition to these new areas of the CFPB's focus, servicers must continue to audit staff activities to ensure the proper policies and procedures are consistently followed, while providing compliant and timely communication with borrowers. In this evolving landscape, servicers need to have the best people, technolo- gies, and practices in place to proactively manage risk—but also a culture of service and excellence. This means going the extra mile to keep your customers happy and empowering them to achieve their homeownership goals. A servicer built to serve borrowers' best interests will more naturally meet and exceed regulatory requirements. Further, this custom- er-centric mindset will enable lending organizations to effectively manage risk, retain customers for life, and achieve responsible, sustainable growth. Finding the Right Resources F or many lending organizations, the most economical strategy is part- nering with a subservicer that offers the adept compliance expertise and servicing technologies required for a compliant and high-performing servicing portfolio. These are capabilities which require significant investment of capital, human resources, and time—often on an ongo- ing basis. This level of investment often does not make financial sense for many small- and mid-sized lenders, as well as investors seeking to grow a servicing portfolio through acquisition. On the other hand, partnering with a subservicer can relieve these organi- zations from the heavy lifting servicing compliance requires. It can also boost efficiencies, allowing compliance teams to focus on more substantive and high stakes matters, and enabling leadership to focus on the core business and bottom line. The ideal subservicing partner has T O B Y W E L L S is President of Cornerstone Servicing, a division of Cornerstone Capital Bank, and a leading provider of mortgage servicing solutions. He has approximately 30 years of experience spanning mortgage servicing, originations, capital markets, and asset management. Throughout his career, Toby has led profitable mortgage servicing organizations through challenging economies and transformational mergers and acquisitions, cultivating organizational cultures that attract and grow high-perform- ing teams. He can be reached at twells@ cornerstoneservicing.com.