Mortgage & Escrow Collaboration 37th Annual Business Meeting & Education Conference Mortgage & Escrow Collaboration Rick Hill - Mortgage Bankers Association Penny Reed - Wells Fargo May 20, 2017 Rick introduces himself and Penny. Introduces the session. Purpose of the session is to talk about existing and potential collaboration to solve problems

This slide look familiar? Current Environment Regulatory uncertainty Lenders fear of buybacks Still learning about the implications of TRID Worries about third party oversight – both directions Lenders and settlement agents all trying to close loans while protecting themselves This slide look familiar? We used it last year Nothing has changed Rick covers, Penny adds comments

A Path Forward, Through Collaboration Don’t wait for regulators to tell us what to do. Collaborate across the entire mortgage industry. No finger pointing. Penny discuss value of collaboration to getting a good result. Rick indicates that failure to collaborate means regulators step into the breach

Current Collaborative Efforts GSE Uniform Closing Dataset Closing Instructions Fee Names Predictable Recording Fees Rick indicates that these are the items we will discuss.

GSE Uniform Closing Dataset Requirements In 9/17, lenders report Borrower Closing Disclosure (CD) data Includes all data in the CD Includes a copy of the CD Known as the Uniform Closing Dataset (UCD) In Q3/18, lenders report the Seller Closing Disclosure data https://www.fanniemae.com/content/news/ucd-announcement-november-2016.pdf Things To Think About Lenders must ensure that the CD and data are the same Lenders need the final CDs and data in a timely manner Lenders will seek electronic exchanges of the data from closing agents to reduce errors Penny covers this slide, comments from Rick

GSE Uniform Closing Dataset - Collaboration Continue to collaborate to improve workflow between lenders and closing agents Preclosing Post closing Utilize industry standard data formats to exchange data Coordinate discussions with the GSEs regarding the cost/value of the Seller UCD reporting requirement Penny covers first point, Rick covers standardization efforts and collaboration on GSE communications

Closing Instructions – Current World Delayed delivery of instructions Inconsistent instruction formats and content from various lenders Inclusion of certain language that is not appropriate for these documents Some closing agents don’t follow instructions Penny covers this slide, with comments from Rick

Closing Instructions – Collaborative Effort We will create a Uniform Closing Instruction template Same information in the same place from lender to lender Prioritized content Easy to find contact information We will create guidelines for consistent use across lenders We are not focused on the legal language in the first stage. We will create sample language MISMO This will be a consensus standard issued by MISMO – Everyone has a say within MISMO MISMO needs your expertise to get it right ALTA, title companies and vendors already collaborate Important: We are not trying to fix everything in the first stage Rick covers this slide, with lots of comments from Penny. The goal of this effort is to reduce risk We want to create incentives for lenders to use the common form – do you know of any?

Fee Names – Current World Fee names vary from lender to lender, closing agent to closing agent, and jurisdiction to jurisdiction Disclosure documents and data exchanges need to use consistent language Hard to get it right when everyone has their own name for the same thing Penny covers this slide

Fee Names – Collaborative Effort Create a standard set of fee names and definitions for use by lenders, closing agents, and others across the industry Ensure that names and definitions are friendly for consumers Ensure compliance with CFPB requirements Develop and issue standards in stages (maybe annually?) Collaborate across industry to encourage adoption of the standards MISMO This will be a consensus standard issued by MISMO – Everyone has a say within MISMO MISMO needs your expertise to get it right ALTA, title companies and vendors already collaborate Rick covers this slide Effort has been underway for over a year. Hope to issue first draft for about 95 data points by summer

Predictable Recording Fees Penny covers this slide

Collaboration – What Else Can We Do? How else can we improve the closing process? How can we make the experience better for consumers?