Thoughts on the New CFPB RESPA Regulations
This week, Miniter Group will publish a white paper titled “CFPB Guidance for Force-Placed Insurance”. This white paper was a result of our popular Compliance Webinar Series that has been dealing with the regulatory issues around force-placed insurance.
During these webinars, we found that many lenders were confused about the new force-placed insurance requirements. This white paper describes the issues around escrow processing, closed end loans, CFPB designed form letters, and proof of insurance requirements. Included in the white paper is a check list to make sure a lender’s force-placed insurance program is compliant with the new guidelines that go into effect in January 2013.
Many of our lenders with Assets greater that $10 billion have CFPB audits scheduled into 2013. It is going to be interesting to see how the CFPB is going to enforce these new regulations. They spent a lot of time and effort to field test their notification letters, so I would suspect that this will be a top priority for CFPB compliance and criticism.
Just last week, we completed thesoftware update of our “Write-Your-Own” and “Outsource Tracking” systems. These updates provide 100% compliance to the new Regulation X (RESPA) force-placed insurance regulations.
When we originally designed our force-placed system in 2006, we followed the 1996 Model Act that provided guidance for CPI insurance for indirect auto portfolios. We had thought that one day, similar guidance would appear on the force-placed mortgage portfolios as well. As we all know, the Dodd-Frank Act provided that guidance in 2010.
Guess what??? The Dodd-Frank act used the guidance from the CPI Model Act. Was that luck or did we have a crystal ball???
Regardless of the answer, our web-based systems only required very minor tweaks, mainly to our automated outbound mail systems, to meet the requirements of the new regulations. I don’t know how the other industry insurance trackers are doing with their modifications, but I’d bet more than a few bucks that we are the first tracker to complete the modifications.
Small lenders that may be overwhelmed with these new regulations should give us a call to talk about solutions for your loan servicing department, or total outsource solutions that will reduce NIE in the servicing department.