Final yr, when the Consumer Financial Protection Bureau (CFPB) introduced short-term flexibilities for mortgage servicers to cope with unprecedented volumes because of the impacts of the COVID-19 pandemic, many servicers took benefit of these leniencies. Nonetheless, a yr later, with a brand new presidential administration in place, the CFPB is placing those self same mortgage servicers of their crosshairs.
First, let’s return to the spring of 2020. The Bureau launched seven separate statements permitting leniency in a lot of areas, together with quarterly reporting, credit score reporting, billing error decision timeframes, examinations, supervisory actions, and extra. For servicers who didn’t have catastrophe protocols in place, relaxed requirements have been like a present from above.
A recent bulletin from the CFPB has addressed these servicers instantly. “Unprepared is unacceptable,” it warned. “There’s a tidal wave of distressed owners who will need assistance from their mortgage servicers within the coming months. There isn’t a time to waste, and no excuse for inaction.”
Whereas the return of strict compliance pointers will impression some mortgage servicers, TMS Subservicing is ready to climate the storm, and for one easy purpose: TMS compliance protocols have been by no means relaxed or compromised. Nor will they ever be.
3 Traces of Protection
Since its inception, TMS Subservicing has developed and adhered to rigorous protocols. In any case, the corporate was based as a result of there wasn’t a subservicing accomplice who was as stringent because the group was internally. TMS requirements have by no means been lowered because of the pandemic or anything.
In actual fact, TMS began by instituting what’s referred to as 3 Traces of Protection or 3LOD. The three departments work collaboratively to make sure TMS operates with structural integrity. Early on, it grew to become clear that if TMS Subservicing was to succeed, going above and past the subservicing establishment must be customary observe.
Line #1: Enterprise Unit Threat Administration
The primary line of protection means establishing High quality Assurance in every line of enterprise. TMS’ tradition of compliance is built-in into each inch of TMS’ operation. They carry out common testing, monitoring, and reporting to establish and eradicate early potential issues instantly.
Line #2: Compliance Testing and Monitoring
Contemplating the CFPB’s new stance towards mortgage servicers, TMS’ second line of protection is especially crucial. That is essential compliance work, beginning with change administration. Regulatory pointers change usually. This staff screens coverage modifications, communicates obligatory protocol changes, and develops plans to make sure compliance. As soon as modifications are carried out, the compliance staff goes again and exams to make sure the modifications are working as meant.
Line #3: Inner Audit
The Inner Audit division employs a four-step course of to establish irregularities. It challenges the effectiveness of all firm processes and controls in the identical means an exterior physique would. Via proactive scheduling, a letter of engagement, an on-site overview, and follow-up conferences, the interior auditors independently assess the state of the enterprise, establish areas of enchancment, and description potential remediation actions.
At TMS, a tradition of compliance and care is woven into and thru all departments. Not like some organizations who herald compliance in a restricted position, the TMS compliance staff is engaged in each step. On this means, the CFPB’s renewed give attention to servicers and their practices is welcome information. There may be nothing to cover right here.
Compliance Going Ahead
The CFPB has promised to judge mortgage servicers by a number of main standards:
- Being proactive
- Working with clients
- Addressing language issues
- Evaluating revenue pretty
- Dealing with inquiries promptly
- Stopping avoidable foreclosures
TMS Subservicing checks all of those packing containers with insurance policies, procedures, and processes which might be confirmed. Because the waves of forbearance crashed ashore throughout a troublesome yr in 2020, TMS labored with clients to seek out the most effective loss mitigation steps primarily based on their distinctive conditions. Moreover, by stepping up as a substitute of again, TMS maintain instances in our Buyer Care Middle have been shorter than rivals, and forbearances and delinquencies have been saved beneath the business common.
In the event that they keep true to their phrase, the CFPB shall be paying many mortgage servicers a go to very quickly. TMS is ready for this and at all times has been. By adhering to a Tradition of Care, TMS holds true to inner compliance requirements, whether or not there’s a pandemic occurring or not. In case your subservicer is subpar with their compliance, the time has by no means been higher to change to the business customary.
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