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» VISIT US ONLINE @ DSNEWS.COM COVER STORY COVER STORY INDUSTRY INSIGHT INSIDE THE BELTWAY There are 49 directives outlined within the Dodd-Frank Wall Street Reform and Consumer Protection Act that specifically address mortgage reforms. Of these, only about 16 have been finalized, according to the D.C.-based law firm Davis Polk & Wardwell LLP, which specializes in regulatory and government enforcement matters for clients in the financial services industry. Davis Polk & Wardwell has closely tracked the progress of the rulemaking that has been done by regulators under the Dodd-Frank Act. In addition to the 49 mortgage-specific rulemaking reforms mandated by the legislation, the firm says there are another 63 required rulemakings categorized as consumer protection regulations (of which only about 29 are finalized) and 44 designated as banking regulations. Add to those tallies the volume of rules and mandates inscribed in federal- and state-level settlements, regulators' consent orders, and agency and investor guidelines, and you've got a dizzying mix of stringent requirements that come with obligatory audits and examinations, all weighing on an industry still shaken by a housing crisis that reverberated through the entirety of the global economy. Daunting as it sounds, companies across the full spectrum of default servicing—bank and non-bank servicers, asset managers, title agencies, property preservation specialists, creditors' attorneys, mortgage brokers, technology and service providers, outsourcers— they're all gearing up to meet the challenges of the new regulatory environment head-on. With diligent preparation and a clear understanding of the changes involved and how they impact the market and the business, increased regulatory scrutiny and constantly changing policies are no match for an industry determined to be faithful stewards of sound and compliant business practices. Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), which has a slew of new mortgage servicing and lending regulations taking effect on January 10, says his agency's "mortgage rules were designed to eliminate irresponsible practices and foster a thriving, more sustainable marketplace." Among the new mortgage regulations coming down the pipe is the Ability-to-Repay (ATR) rule and the immensely impactful Qualified Mortgage (QM) rule. An anthology of new servicing rules addressing borrower payments and account errors, loss mitigation procedures, force-placed insurance protections, and homeowner disclosures are also on the CFPB's January 10 checklist. Other new rules surfacing next month address appraisals, escrow accounts, protections for high-cost mortgages, and compensation and qualifications for loan originators. Have you implemented the procedural changes necessary to ensure regulatory compliance? To improve transparency and minimize risk? Are your operational audits and portfolio reviews so comprehensive they not only uncover potential trouble spots, but unearth new opportunities for growth? On the following pages, our panel of industry insiders offers recommendations for effective implementation of new mortgage regulations and insight on living in a compliant world. With their advice and the many resources out there to aid in satisfying new regulatory requirements, you'll be able to concoct your own formula for compliance and meet tomorrow's regulatory challenges head-on with strength and confidence. 47