Five Star Default Servicing Conference & Expo
Safeguard was honored to be the hosting sponsor for the 2014 Five Star Conference and Expo, which was held once again at the Hilton Anatole in Dallas, TX. This year’s conference included a special Q&A session featuring President George W. Bush, Former First Lady Laura Bush, and their daughters, Barbara Bush and Jenna Bush Hager. Additionally, Lt. General Leroy Sisco (Ret.) and Kathy Ireland were featured speakers during the Military Warriors Support Foundation home donation presentation, along with a special live performance by renowned recording artist Wynonna Judd. The sessions during the conference focused on compliance, foreclosure, investment, property management, REO and servicing. Safeguard participated on three panels. Summaries of these sessions are below.
Tomorrow’s Elements of High Risk
Ann Thorn, Bank of America
Robert Klein, Safeguard Properties/SecureView
Rick Sharga, Auction.com
Edward B. Kramer, Wolters Kluwer
Adam Codilis & Associates, P.C.
During this roundtable session, panelists offered insight on how they identified future elements of high risk. Participants agreed that due to complicated regulatory standards it can be difficult to pinpoint exactly what those risks might be when executing a foreclosure. It was suggested that past and present guidelines set forth by the CFPB could potentially stifle future lending if regulations are not made clear. When evaluating future elements of high risk panelists agreed that compliance was at the crux of this discussion.
Credit Resets Create Future Risk
Rising home values over the last several months will most likely create positive equity for many homeowners; however, we should still proceed with caution. Borrowers with a HELOC that’s due to reset should contact their lenders to become aware of how this with affect their rates.
Negative Effects of Lengthy Foreclosure Timelines
It is widely accepted that extended foreclosure timelines can cause distress to homeowners, servicers, and communities when properties are vacant. In the past decade charge-offs and walk-aways have been a looming obstacle. To solve this problem law makers nationwide are crafting legislation to establish a definition for vacancy and shorten the foreclosure process for these homes.
Procedural Issues Arising With Vacant Properties
A major challenge in the creation of these rules is how a servicer establishes vacancy and what steps should be taken to protect the rights of homeowners. Achieving this balance creates a degree of risk for lenders. Participants concluded that while not all laws are created equal and crafting them should be done so with respect to the homeowner, recognizing this problem is a step in the right direction.
Property Preservation in the New Regulatory Environment
Edmund Buckley, Aspen Grove
Paul Carlson, Assurant Field Asset Services
Alan Jaffa, Safeguard Properties
Brandon Kirkham, VRM
Chad Mosley, MCS
Compliance with Local Ordinances
Field services vendors must manage the assignment from servicers to achieve compliance with regulations. To do so, it is important to receive accurate data from clients and from local vendors who have a presence in communities. Partnerships with municipalities also enables field services companies to stay knowledgeable of changes – sometimes even before they are enacted. However, it is a challenge for the industry to ensure full compliance since there is no technological solution today. Additionally, the interpretation of the data also presents a challenge. VRM has a process by which key business partners are part of implementation discussions and a change board meets regularly to understand global impact.
Vendor Background Checks
Background check requirements for vendors are applicable at the same level for all vendor types. Applying a different level of check to vendors based on the type of service they will provide could aid field services providers by opening up more vendor options for jobs. However, implementing a system like that would change the vendor management approach throughout the industry.
Validating data is accurate is vital within this industry. One way discussed to ensure accurate completion was to capture who was where and at what time. Then have the ability to obtain validation through a third-party. However, the financial impact of these new requirements is still unknown to the industry. Therefore, the panel recommended collaboration across field services companies to raise these issues.
It was suggested that the conversations start even further upstream, with investor requirements. As technology and compliance requirements evolve, using video to validate work completion and condition reporting will soon become a reality. Taking advantage of this tool and other new ideas is one critical way the industry can get properties looking better more quickly.
It was proposed that field services vendors work with one another on a global technology solution for the industry, instead of each building their own systems. However, members of the panel pointed out that this may not be the best idea given that each company has their own standards and requirements which need to be honored. Additionally, this path might hamper progress to integrate with client systems.
The Cost and Consequences of Compliance
Donald Lampe, Morrison and Foerster
Mike Greenbaum, Safeguard Properties
Barry Hays, TeleVoice,
Marc Hinkle, MCS
Maria Moskver, Walz Group
Kevin Wall, First American Mortgage Services
During this session, discussions focused on the increase in new regulations, in particular the involvement and regulations that have been implemented by the Consumer Financial Protection Bureau (CFPB). The panelists looked at how these new regulations have affected the way companies manage their processes, adopt and invest in new technology, enlist third-party assistance, and even recruit and retrain staff, all of which increase the cost of servicing. Each panelist discussed how their operations were handling and implementing these new regulations.
Field Services Companies Response
Looking at the changes to regulations, field services companies have had to add additional procedures and controls. In doing so, it is important to start with an intentional design of the company’s process. This needs to include diagraming out how work flows to the company’s network, how results are produced and then how the results flow back into the company’s operations. Making sure the right controls are in place to ensure the information being received is what’s expected is the key to developing a compliant process. It is important to make sure these control offer the ability to gather data so immediate reporting can be produced to support that the operation is meeting the regulators, clients and company’s expectations.
When Management Listens
Safeguard’s consumer complaint response and tracking started with management listening to complaint calls. From this experience the management team designed a process and scripts so the staff could respond to the complaints that were being received. The staff was then trained on the process. Management continues to listen to calls so that the process can be updated and improved. As updates are made the team is brought back in and trained on the updates. This process continues and includes our clients listening to calls. The entire time all calls are tracked to allow for detail and immediate reporting.
The group discussed the ever-increasing expectation from regulators and how important it is for organizations to have the ability to adapt to change swiftly, technology resources that allow for data retrieval and retention, and a system that allows for the documentation of operational changes. The future holds an environment that will continue to be heavily regulated and we as an industry provider need to be prepared to respond and compile.
To view a recent DS News article featuring session comments from Safeguard VP of Operations Mike Greenbaum, please click here.
To view a recent DS News article featuring session comments from Safeguard Founder and Chairman Robert Klein, please click here.
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally.
The Five Star Default Servicing Conference & Expo was held in Dallas, TX.