DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1542096
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 44 December 2025 C O U N S E L ' S C O R N E R and due-process questions in Article 13 LLC v. Ponce De Leon Federal Bank. Its ruling will determine whether older accelerations are permanently time- barred or whether pre-FAPA doctrines still apply. Until then, trial and appellate courts continue to apply FAPA broadly. This may leave servicers with mean- ingful exposure and potential loss of enforcement rights across legacy NY portfolios. At the federal level, the CFPB's proposed Regulation X overhaul and the rollback of remaining COVID-19 era protections point toward earlier borrower engagement, stricter com- munication timelines, and intensified scrutiny of fees, credit reporting, and vendor management. Depending on Congress's decision to fund the CFPB in 2026, these changes may directly affect cost structures, advance obligations, and may also increasingly alter performance expectations for distressed assets. New Jersey's Community Wealth Preservation Program, or "CWPP," signed January 12, 2024, expands access for foreclosed-upon homeowners, next-of- kin, tenants, and nonprofit community development corporations to purchase properties at sheriff 's sales and establish- es key procedural changes (including a 3.5 % deposit and 90-business-day closing period). CWPP also changed sheriff-sale dynamics by granting eligible community buyers statutory priority, thereby redefin- ing bidding behavior and altering transfer expectations. Maryland's recent licensing upheav- al, driven by Estate of Brown v. Ward, the Maryland Office of Financial Regula- tion, 2025 guidance, and the subsequent legislative fix creating a passive-trust exemption, highlights how quickly regu- latory frameworks can shift. Separately, FinCEN's nationwide residential real estate reporting rule for non-financed transfers to entities and trusts, effective December 1, 2025, will require bene- ficial ownership reporting for many trust-based acquisitions. This may push investors to strengthen onboarding and ownership-verification procedures for Maryland portfolios as well. Q: How do you see the role of law firms evolving as technology becomes more integrated into servicing and default operations? As technology becomes more inte- grated into servicing and default opera- tions, I don't think the role of law firms disappears; I think it becomes sharper. Currently, law firms serve two primary functions: we practice law, and we act as an informal database. Clients come to us for timelines, statutory guidance, county-specific nuances, and procedural requirements. Information that often re- sides in many places and comes together only through experience. Technology is about to collapse all of that. As AI, automation, and more intelligent infrastructure take hold, much of the informational friction that exists today will be eliminated. The questions we receive today, which are challenging because systems don't communicate with each other, will be answered instantly. Even more complex data requests, such as standardized payment histories or judgment figures, will surface cleanly, without the back-and-forth that currently characterizes the process. When that happens, law firms won't lose relevance; they'll lose noise. Every- thing mechanical, repetitive, or based on scattered information will be automated. And that's a good thing. Because what remains, what can't be automated, is the core value: judgment, insight, strategy, and the ability to navigate ambiguity. This is where our industry is head- ed. The firms that survive won't be the ones built to click buttons or move vol- ume; those models are already on bor- rowed time. The firms that thrive will be the ones that operate like true strategic partners. The ones that understand the nuance of litigation, pattern recognition across jurisdictions, risk calculus, nego- tiation dynamics, the timing of courts and judges, and the invisible forces no spreadsheet can capture. In other words, I don't think tech- nology reinvents the law firm; I believe it reveals it. It strips away the commod- ity layer and exposes the part of the profession that matters. Automation won't eliminate lawyers, but it will put a spotlight on those who think deeply, anticipate, interpret, and guide. Whether that shift takes one year or 10 is almost irrelevant. The accelerant is already here. AI isn't just a tool; it's the pressure test that will force every firm to "Automation won't eliminate lawyers, but it will put a spotlight on those who think deeply, anticipate, interpret, and guide." —Adam J. Friedman, Managing Partner, Friedman Vartolo LLP.