New Mortgage Servicing Rules Ashley Hutto-Schultz Director of Compliance Castle & Cooke Mortgage

Supervisory Efforts Persistently focused on mortgage servicing Guidance Updated examination procedures (6/2016) Examinations Supervisory Highlights – Special Edition (6/2016) Enforcement actions, to name a few: Residential Credit Solutions (7/2015) Green Tree Servicing (4/2015) Flagstar Bank, F.S.B. (9/2014)

Trends CFPB particularly interested in: Default servicing Loss mitigation Servicing transfers Technology-driven processes

Final Rule New definitions: Delinquency Successors in interest Loss mitigation procedures and foreclosure protections Periodic statements and early intervention notices for borrowers in bankruptcy FDCPA Interpretive Rule

Delinquency Definition: “[B]eginning on the date a periodic payment sufficient to cover principal, interest, and, if applicable, escrow becomes due and unpaid, until such time as no periodic payment is due and unpaid.”

Delinquency – Impact Timing requirements Early intervention Continuity of contact 120-day foreclosure waiting period Tolerances and timely payments from escrow Loan modifications

Successor in Interest Definition now also includes: Spouse or children who become an owner of the property Person to whom ownership was transferred as a result of a divorce decree, legal separation, or incidental property settlement agreement Inter vivos trust in which the borrower is, and remains, a beneficiary Person who received a transfer of property as described in regulations from the Federal Home Loan Bank Board

Successors in Interest – Impact Servicing transfers Error resolution Request for information Early intervention Continuity of contact Loss mitigation Force-placed insurance Escrow provisions

Loss Mitigation Related to: Status updates Resubmission of applications Foreclosure sale prohibition, in some cases

FDCPA Interpretive Rule: Safe harbor if compliant with mortgage servicing rules, specifically regarding: Communicating with successors in interest Providing early intervention notice or responding to borrower-initiated communication regarding loss mitigation for a borrower who invoked “cease communication” right under FDCPA

How to Prepare Effective 12 months – or 18 for bankruptcy and successor in interest provisions – after Federal Register publication Compliance management framework: Policies SOPs Training Vendor management IT solutions Subservicers

Questions?

Thank you.