© 2014 Office of Massachusetts Attorney General Martha Coakley Leveraging NMS Standards/CFPB Regulations Michael Lecaroz Counsel to HomeCorps

Overview The Rules Consumer Financial Protection Bureau Regulation X- 12 CFR 1024 (RESPA) Regulation Z- 12 CFR 1026 (TILA) National Mortgage Settlement, Exhibit A BofA, Wells Fargo, Chase, Citi, GMAC Ocwen Loan Servicing Massachusetts Division of Banks 209 CMR 56.00:Foreclosure Prevention Options 209 CMR 18.00:Conduct of the Business of Debt Collectors and Loan Servicers © 2014 Office of Massachusetts Attorney General Martha Coakley

Overview The Loan Modification Process Postponing Foreclosure Sales Submitting the Application Communicating with SPOCs Receiving a Decision Completing a Trial Payment Plan Responding to a Service Release © 2014 Office of Massachusetts Attorney General Martha Coakley

Overview Tracking Focus on helping homeowners, but also track violations Create Violation Spreadsheet 6 Categories 3 to 4 sub-categories Collect related information, i.e., names of SPOCs, Investor Communicate this information to servicers © 2014 Office of Massachusetts Attorney General Martha Coakley

Postponing Foreclosure Sales Prohibition on referring/scheduling sale date Complete package within 120 days of delinquency Complete package within 30 days of referral Best practices Determine from servicer if referral made Use document collection mistakes to delay referral to foreclosure or scheduling sale date ©2014 Office of Massachusetts Attorney General Martha Coakley

Postponing Foreclosure Sales Prohibition on completing sale Complete package within 37 days of sale date Submitted documents within 30 days of last MIL Expedited review if complete package 15 days prior to sale Should follow investor guidelines for late packages Best Practices Ask for Name of Investor Explain what homeowner has done to submit package Submit as complete a package as possible © 2014 Office of Massachusetts Attorney General Martha Coakley

Submitting the Application Timeline Missing items letter within 5 business days Documents honored for 90 days Decision within 30 days of complete application © 2014 Office of Massachusetts Attorney General Martha Coakley

Submitting the Application Best Practices Ask for prior missing items letters Ask servicer to use reasonable business judgment for exceptions Understand the homeowner’s income and servicer’s loan modification waterfall Understand difference between SPOC, underwriter, etc. © 2014 Office of Massachusetts Attorney General Martha Coakley

Communicating with SPOCs Communication SPOC must be reasonably available SPOC must communicate with 3 rd parties Best Practices Develop working relationships with SPOCs Confirm documents, confirm who is looking at documents Understand what SPOCs do at each servicer © 2014 Office of Massachusetts Attorney General Martha Coakley

Communicating with SPOCs SPOCs must give accurate information Best Practices Confirm which department is asking for information or giving information Explain why homeowner is confused Ask questions, make requests, listen Understand what SPOC is going to do next © 2013 Office of Massachusetts Attorney General Martha Coakley

Receiving a Decision NMS Servicers and “certain mortgages” must offer reasonable, NPV positive modifications Must document specific reasons for denial Must identify investor and restrictions Best Practices Do your own waterfall Ask for verified income number Ask for unpaid principal and arrearage © 2014 Office of Massachusetts Attorney General Martha Coakley

Receiving a Decision Must review for imminent default Should assist recovered hardship HAMP Tier 2 Straight Cap Repayment Plan Best Practices Do your own underwriting Advocate based on hardship Make very specific requests © 2014 Office of Massachusetts Attorney General Martha Coakley

Completing a Trial Payment Plan NMS Servicers must promptly convert to permanent successfully completed TPP Servicer must give extra time for non- payment requirements Servicer must provide countersigned within 45 days Servicer must not add waiver of liability © 2014 Office of Massachusetts Attorney General Martha Coakley

Completing a Trial Payment Plan Best Practices Keep copy of trial offer Confirm all 3 payments Ask about bankruptcy, second liens, insurance, co-borrowers Ask monthly for copy of permanent agreements Ensure that agreement is properly notarized Confirm permanent payment is same as trial payment Keep copy of countersigned documents © 2014 Office of Massachusetts Attorney General Martha Coakley

Responding to a Service Release NMS Servicers, must honor all trials and permanent modifications All servicers must ensure that all documents and information is transferred Best Practices Ensure new servicer is speaking with old servicer Send new servicer copy of trials and agreements Advise homeowner to save rejected payments © 2014 Office of Massachusetts Attorney General Martha Coakley

Questions? © 2014 Office of Massachusetts Attorney General Martha Coakley