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e results paint a picture of an industry that has made incredible strides. e number of non-current loans fell from more than 5 million in the first quarter of 2013 to under 4 million in the fourth quarter of 2014, reflecting a 27 percent drop. Five Star President and CEO Ed Delgado, who initially proposed the idea for the report last year in response to mounting criticism of the industry by the CFPB, maintains the purpose of the report is not to "dismiss or diminish" the validity of the inquiries by consumers, but rather to "position and better understand the data." "e information contained in this report plays an important role in measuring the scope of volume related to CFPB inquiries made, in juxtaposition to the total number of mortgage holders in the U.S. market," Delgado said. "rough the data lens, we can clearly examine operational efficiency and defect while measuring progress in providing quality service to homeowners." "A 53 percent reduction in complaints about loan modifications and foreclosures is great news," Fred- die Mac spokesman Brad German said. "I would attribute much of the improvement to the rising diligence and effectiveness of many servicers plus the im- pact of the Servicing Alignment Initiative, which requires early and frequent outreach to borrowers who need assistance." To produce these numbers, Black Knight and Five Star made the commitment last year to promote a greater understanding of CFPB data by creating a prototype report using data contributed by the CFPB and servicers. Conclusions from the first report published in April show servicers are performing at optimum levels in dealing with non-current loans. "I think it does demonstrate that the industry has been focusing on the more difficult loan population: the non-performing loans, those that are in some stage of delinquency," said Dori Daganhardt, VP of product marketing and market strategy at Black Knight Financial Services. "ey are trying to ensure that the customer experience through that process has improved." Black Knight's loan-level data report aims to provide the industry with a closer look at the CFPB's data, so they have an accurate assessment of what is happening with both current loans and non-current loans facing servicing complaints. Daganhardt said the data is intended to inform both regulators and financial firms as they track and respond to trends in the CFPB database. Her interpretation of this first report is that the "industry has been responding to the complaints and has tackled probably the most difficult cohort of the whole servicing book." She added, "What we see in the data, complaints are falling in the delinquent, default and foreclosure category, but the overall book is falling. e absolute overall number of complaints has decreased, and the overall book of loans has declined." For Daganhardt, this "speaks positively of the efforts servicers have undertaken." THE INDUSTRY RESPONDS Bob Caruso, EVP of sales, strategy, and servicing at Black Knight firm, ServiceLink, supports the ongoing loan-level analysis and suggests the industry is hungry for data that will detect areas of risk, while celebrating improvements made. "e report helps servicers understand how they are performing versus the average and whether we have the same pain points as our peers," Caruso said. "We're all happy that complaint volume is low but also quite aware that we have more opportunity to improve. My hope is that consumers better understand that although the industry has been through a lot, we are better for it and will continue to improve. Complaints are much lower than we think customers may be aware." Ray Barbone, EVP of BankUnited, suggested the Black Knight white paper is a revelation of sorts—one that will hopefully show the industry is performing quite well when it comes to loan servicing. "More specifically, notwithstanding the fact it has been widely publicized that mortgage servicing issues are one of the highest segments of complaints and that there have been thousands of such complaints received, it is equally worth noting that, according to the report, complaints related to general servicing of performing loans appear to be running at less than one 1/100th of a percent," he explained. "It would be interesting to see a comparison of similar analyses for other financial services segments as well as non-financial service industries. Further, I think the report provides lenders with the benefit of some very high-level data by which to benchmark themselves." e white paper reflects a change in how the industry not only interacts with data, but also with the CFPB itself. e industry has shown an interest in working with its newest regulator to fix the problems detected, but at the same time, servicers desire more informed data. One issue yet to be addressed is whether the regulator is able to add context to complaints that enter into the CFPB database. "I would like to see the industry and CFPB continue to work together to provide even deeper context relative to complaints received, "Through the data lens, we can clearly examine operational efficiency and defect while measuring progress in providing quality service to homeowners." —Ed Delgado, Five Star President and CEO

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