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84 Nine months after implementation, it's clear that the new servicing regulations put forth by the Consumer Financial Protection Bureau muddied the waters for servicers attempting to remain in compliance. Despite strenuous contortions on the industry's part, good faith efforts to comply may not be good enough. Sounding like Clint Eastwood in the movie "Sudden Impact", Steve Antonakes, the deputy director of the Consumer Financial Protection Bureau (CFPB), didn't threaten mortgage servicers to "go ahead, make my day" when he appeared at the Mortgage Bankers Association's Servicing Conference in February, but his message could not have been clearer. Near the conclusion of a blistering attack on the past practices of mortgage servicers during the financial crisis, Mr. Antonakes warned: "But please understand: if you choose to operate in this space, the fundamental rules have changed forever. It's not just about collecting payments. It's about recognizing that you must treat Americans who are struggling to pay their mortgages fairly before exercising your right to foreclose. We have raised the bar in favor of American consumers, and we are ready, willing, and able to vigorously enforce that bar…business as usual has ended in mortgage servicing." He said that he didn't expect a standing ovation when he left; in that regard, he wasn't disappointed. It has been nine months since the effective date of the CFPB's servicing regulations, and a much longer time since the CFPB first proposed the regulations. Going well beyond the servicing provisions adopted by Congress in the 2010 Dodd-Frank Act, the CFPB's servicing regulations are derived from a potpourri of governmental initiatives in the servicing arena since the financial crisis arrived in 2008. ere are elements from the Department of Treasury's Making Homes Affordable Program (HAMP), the fourteen similarly-worded Consent Orders (the Consent Orders) executed by the applicable federal banking agencies and various banks and, of course, the National Mortgage Settlement (NMS) between and among five banks, the HUD and 49 state attorneys general among other federal and state governmental signatories. Even if state-chartered, non-depository mortgage servicers were not subject to the Consent Orders and the NMS, the general principles did not go unnoticed. Indeed, the industry did not necessarily need new regulations to get the message and begin to manage in accordance with the message. e common theme for default servicing was clear. It is critical to have, among other features: the appropriate number of trained staff, including a single point of contact for borrowers in distress; well-functioning, integrated information systems that contain accurate and complete loan level data that can be accessed on a real time basis; comprehensive policies, procedures, and compliance management systems that are reasonably designed to ensure compliance with laws and investor/insurer requirements; a robust loss mitigation program that regards foreclosure as a remedy of last resort and protects borrowers from losing their mitigation protections when their servicing is transferred; and a targeted focus on responding quickly and effectively to resolve customer complaints. e new servicing regulations may have been inspired in part by these earlier government initiatives, but they are not an exact duplicate. Unlike these prior endeavors, the CFPB had to follow "notice and comment" rulemaking under the Administrative Procedures Act. It enabled all interested stakeholders to provide input to the CFPB's initial proposals, and to its credit, the CFPB revised its final regulations to account for many of these comments. No trace of that cooperative attitude was visible one month after the regulations' effective date when Antonakes spoke at the MBA Servicing Conference. He characterized the new regulations as an attempt to force servicers to treat borrowers with the "respect, dignity, I N D U S T R Y I N S I G H T / L A W R E N C E P L A T T A N D K E R R I S M I T H SOLVING THE SERVICING RIDDLE P

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