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ยป VISIT US ONLINE @ DSNEWS.COM Compiled by the DS News Staff FIVE MINUTES WITH SVP OF PRODUCT MANAGEMENT, SERVICING SOLUTIONS AND TECHNOLOGY, LPS Vicki Vidal PAGE 35 INSIDE THE JOURNAL // MOVERS & SHAKERS // ON THE WEB // THE APP SPECTRUM CFPB REPORT IDENTIFIES MORTGAGE SERVICING ISSUES Since the Consumer diligence on transferred Financial Protection servicing data but did "Our examinations of Bureau (CFPB) launched not review any individual banks and nonbanks its supervision program, documents sent over allow us to correct it has focused much of from previous servicers, its work on mortgage problems before more including information on servicing. consumers are affected." trial mods. Upon examining the Examiners also practices of both bank discovered issues and nonbank servicers, the CFPB found with payment processing. One example problems that it says can be harmful to provided in the CFPB's report was of consumers, such as disorganized account a servicer that did not give consumers transfers and loss mitigation mistakes. adequate notice on where to send The CFPB released a report in late August payments after the address changed. based on supervisory examinations According to the CFPB, such action performed between November 2012 and constitutes a "potentially unfair practice June 2013. impacting thousands of borrowers." When "Our examinations of banks and alerted of the issue, the servicer did act nonbanks allow us to correct problems to ensure late fees and other negative before more consumers are affected," consequences were not enforced, said Richard Cordray, CFPB director. examiners noted. "[The] report highlights both the mortgage Other issues examiners found related servicing problems throughout the industry to payment processing included excessive and the challenges of making sure that delays when canceling private mortgage nonbanks are following federal law. Fixing insurance payments and property taxes both is a priority for us." that were paid later than expected, In pinpointing problems with mortgage preventing borrowers from claiming a tax servicing transfers between institutions, deduction. the CFPB identified risks that could cause CFPB examiners also pointed to consumers to miss payments, delay important loss mitigation issues, such as poor loss mitigation procedures, or affect the communication with borrowers, including standing of borrowers' mortgage loans. conflicting instructions for loss mitigation Examiners detected issues such as procedures; long application review unlabeled and unorganized paperwork, periods; and inconsistencies in waiving fees servicers' failures to communicate new and interest charges. servicing transfers to borrowers, and a Weak compliance management lack of protocols on how to handle certain surrounding loss mitigation processes documents such as loan modification agreements to ensure the proper transfer of creates fair lending risk, the CFPB explained, and can result in violations of the servicing responsibilities. Examiners cited one servicer that conducted some due Equal Credit Opportunity Act. A look at facts you didn't know you couldn't live without More than 700,000 borrowers who were current in May missed their June mortgage payment, pushing the national delinquency rate up almost 10% in one month's time to 6.68%, Lender Processing Services reports. top10 Take a look inside the numbers data b i t s MOST OVERVALUED METROS U.S. Metro Home prices relative to fundamentals* (Q3 2013) Y-o-Y change in asking prices (July 2013) Orange County, CA 12% 23% Los Angeles, CA 10% 21% Austin, TX 9% 10% Oakland, CA 7% 31% Honolulu, HI 7% 6% San Jose, CA 5% 21% San Antonio, TX 5% 12% Houston, TX 5% 10% San Francisco, CA 4% 17% Dallas, TX 4% 13% MOST UNDERVALUED METROS U.S. Metro Home prices relative to fundamentals* (Q3 2013) Y-o-Y change in asking prices (July 2013) Palm Bay-Melbourne-Titusville, FL-20% 5% Cleveland, OH -19% 8% Akron, OH -19% 3% Lakeland-Winter Haven, FL -18% 14% Toledo, OH -17% 6% Detroit, MI -17% 22% Dayton, OH -17% 1% Jacksonville, FL -16% 6% Las Vegas, NV -16% 33% Cape Coral-Fort Myers, FL -16% 13% *Positive numbers indicate overvalued prices; negative numbers indicate undervalued. Source: Trulia.com Data from Wells Fargo and the National Association of Homebuilders shows for the first time in nearly five years, fewer than 70% of U.S. homes are affordable to those earning the national median income of $64,400. 15